Negotiated prices for ten types of drugs will take effect in 2026
The Inflation Reduction Act (IRA) of 2022 gives Medicare new ability to negotiate prices for the most expensive drugs covered by the program. The first set of negotiated drug prices will take effect in 2026 and are expected to save Medicare beneficiaries $1.5 billion annually in out-of-pocket costs while saving the Medicare program $6 billion annually. The negotiated price is at least 38% lower than the 2023 list price.
Ten important and expensive drugs
The drug selected for negotiation must be a brand-name drug that has no competition and must be one of the drugs driving the most Medicare spending. Here are ten drugs for 2026:
- Eliquis
- Jardines
- barreto
- Januvia
- Farsiga
- Entresto
- Embrel
- Ibwika
- Strala
- Novo Log
These drugs treat serious chronic conditions such as cancer, diabetes, blood clots, heart failure, autoimmune diseases, and chronic kidney disease. In 2022, Part D spent about $46.4 billion on these drugs alone, accounting for 19% of all Part D spending, with beneficiaries paying $3.4 billion out of pocket. An assessment based on total expenditures can include drugs that are extremely expensive per patient as well as those that are widely prescribed to beneficiaries.
Negotiation timetable
All eligible Medicare beneficiaries will have access to these prices, and new drugs will be added to the negotiated list each year. The next set of negotiated prices will take effect in 2027 for an additional 15 drugs, including blockbuster diabetes drugs like Ozempic.
- 2023 – CMS announces the first 10 Part D drugs to be negotiated.
- 2024 – CMS announces negotiated prices.
- 2025 – Medicare enters price negotiations for 15 more Part D drugs.
- 2026 – Negotiated prices for the first 10 Part D drugs will take effect. This is the first time people on Medicare will see the direct impact of the negotiations. CMS will select an additional 15 drugs for negotiation under Part D or Part B.
- 2027 – Negotiated prices for 15 selected Part D drugs will begin in 2025. CMS will announce 20 additional Part B or Part D drugs for negotiation.
CMS will continue price negotiations for other drugs over the next few years, with the negotiations set to take effect in two years. Each round is cumulative, increasing the total number of agreed-price medicines.
Reconciliation bill limits potential for negotiation plan
Unfortunately, the Budget Reconciliation Act of 2025 (H.R. 1) further limits the drugs that can be negotiated, making the IRA negotiation program less effective. KFF estimates the change will increase Medicare spending by at least $5 billion. As always, increased Medicare spending means increased out-of-pocket costs for beneficiaries.
Based on the Inflation Reduction Act
On health insurance rights, we condemn the withdrawal of the IRA negotiating framework. We believe that more drugs should be negotiated, not less. Other cost-saving aspects should also be enacted in the law to reduce costs for those covered by other forms of insurance.
further reading
Read more information about negotiating drug prices from the American Association of Retired Persons (AARP).
View more IRA health insurance changes and timelines.
