An increasing number of older Americans can’t afford the prescriptions they need to stay healthy. In one study, roughly 1 in 5 people age 65+ took shortcuts—such as skipping doses or delaying refills—due to financial worries.¹ 

The Medicare Drug Price Negotiation Program was created to address this problem. If you have Medicare, keep reading to find out how (and when) this program may affect you or an older adult you care for.

What is the Medicare Drug Price Negotiation Program?

The Medicare Drug Price Negotiation Program is part of the Inflation Reduction Act (IRA) of 2022, which included several provisions to help lower prescription drug costs for people with Medicare. This provision allows Medicare—for the first time ever—to negotiate drug prices directly with pharmaceutical companies. The goal is to improve the affordability of some of the most expensive drugs covered under Medicare Part B and Part D. Part B covers drugs administered by a physician.

Reduced prices from drug negotiations for the first 10 drugs took effect starting in January 2026. and reduced prices from drug negotiations for the second 15 drugs will take effect starting in January 2027.

Going forward, the Centers for Medicare & Medicaid Services (CMS) will then select:

• Up to 15 additional drugs (including those under Part B) for 2028
• Up to 20 additional drugs for 2029 and subsequent years

“In a country as rich as ours, every person should have access to affordable health care. Allowing the government to negotiate on consumers' behalf is a very welcome step in that direction," said Ramsey Alwin, NCOA President and CEO, in a statement on the start of drug price negotiations.

Which prescription drugs will be negotiated?

The drugs that qualify for Medicare price negotiation are from a list of high-cost, brand-name, single-source drugs that have no generic competition on the market.²

The 10 drugs selected for the first round of Medicare negotiation:

• Eliquis: For preventing strokes and blood clots
• Jardiance: For type 2 diabetes and heart failure
• Xarelto: For preventing strokes and blood clots
• Januvia: For type 2 diabetes
• Farxiga: For chronic kidney disease
• Entresto: For heart failure
• Enbrel: For arthritis and other autoimmune conditions
• Imbruvica: For blood cancers
• Stelara: For Crohn’s disease
• Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill: Insulin products for diabetes

The 15 drugs selected for the second round of Medicare negotiation:

• Ozempic; Rybelsus; Wegovy: For type 2 diabetes, obesity, and cardiovascular disease
• Trelegy Ellipta: For asthma and COPD
• Xtandi: For prostate cancer
• Pomalyst: For Kaposi sarcoma and multiple myeloma
• Ibrance: For breast cancer
• Ofev: For idiopathic pulmonary fibrosis
• Linzess: For chronic idiopathic constipation; Irritable bowel syndrome with constipation
• Calquence: For chronic lymphocytic leukemia/small lymphocytic lymphoma; Mantle cell lymphoma
• Austedo; Austedo XR: For Chorea in Huntington’s disease; Tardive dyskinesia
• Breo Ellipta: For asthma and COPD
• Tradjenta: For type 2 diabetes
• Xifaxan: For hepatic encephalopathy; irritable bowel syndrome with diarrhea
• Vraylar: For bipolar I disorder; major depressive disorder; schizophrenia
• Janumet; Janumet XR: For type 2 diabetes
• Otezla: For oral ulcers in Behçet’s Disease; plaque psoriasis; psoriatic arthritis

How will these changes affect me?

Once fully implemented, the Medicare Drug Price Negotiation Program is expected to drop prices on negotiated drugs for millions of older adults:

• The first 10 drugs selected for Medicare price negotiations are predicted to lower costs by an average of 22%. Medicare beneficiaries could save about $1.5 billion from the lower prices that took effect in 2026.³
• The next 15 drugs selected for negotiation are expected to see even larger price reductions—about 44% on average. Medicare benificiaries are expected to save an additional $685 million when these negotiated prices take effect in 2027.³

People with Medicare will have better access to prescription drugs that help them manage chronic and life-threatening conditions. More older adults will be able to start medications, take them appropriately, and stay on them without making potentially dangerous trade-offs.

Experts predict the program will also save taxpayers $160 billion by lowering Medicare costs.

Other Medicare prescription drug provisions

In addition to drug price negotiation, there are several other important provisions in the Inflation Reduction Act designed to lower health care costs for people with Medicare.

Several provisions have already taken effect:

• Medicare now covers a greater portion of the cost for high-quality biosimilars (drugs made from a natural source) for a period of five years, which began October 1, 2022.
• Monthly out-of-pocket cost sharing for insulin is capped at $35.
• Vaccines recommended by the Advisory Committee on Immunization Practices (ACIP) are 100% free.
• Drug manufacturers that raise their prices at a faster rate than inflation will face a financial penalty.

What went into effect in 2024:

• The 5% coinsurance for catastrophic drug costs was eliminated.
• Eligibility for the full Medicare Part D Low-Income Subsidy (LIS, also called “Extra Help”) was expanded to beneficiaries with incomes up to 150% of the federal poverty level. LIS lowers premiums and out-of-pocket costs for prescription drug coverage.
• From 2024-2029, annual Part D premium increases is capped at 6%.

What went into effect in 2025:

• An annual cap on drug out-of-pocket costs was introduced in 2025, which increased to $2,100 in 2026. This can save beneficiaries up to thousands each year. In addition, the Medicare Prescription Payment Plan provision allows enrollees to pay their out-of-pocket drug costs in the form of fixed monthly payments over the course of the plan year (instead of all at once).

“These key provisions help promote aging well by making vital medications affordable for more older Americans,” says Josh Hodges, NCOA’s Chief Customer Officer. “Reducing drug costs will serve to improve the Medicare program now and ensure it remains strong and solvent for future enrollees.”

Are you 65—or about to turn 65? Check out our 5 Steps to Getting Started With Medicare.

Source

1. Stacie B. Dusetzina, PhD et al. JAMA Network. Cost-Related Medication Nonadherence and Desire for Medication Cost Information Among Adults Aged 65 Years and Older in the US in 2022. May 18, 2023. Found on the internet at https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2805012

2. Juliette Cubanski. FAQs about the Inflation Reduction Act’s Medicare Drug Price Negotiation Program. Kaiser Family Foundation. Updated January 2025. Found on the internet at https://www.kff.org/medicare/issue-brief/faqs-about-the-inflation-reduction-acts-medicare-drug-price-negotiation-program/

3. KFF. Key Facts About Medicare Drug Price Negotiation. March 11, 2026. Found on the internet at https://www.kff.org/medicare/key-facts-about-medicare-drug-price-negotiation/?entry=table-of-contents-in-2026-cms-selected-15-medicare-part-b-and-d-drugs-for-price-negotiation-with-negotiated-prices-taking-effect-in-2028