Medicare Could Cut Prices on These Medications by 50% (Are Yours on the List?)

Medicare prescription drug coverage may help you afford the medications you need, so you can keep more of your hard-earned cash. Now, prices for certain medications might be even lower. Under the Inflation Reduction Act, Medicare is negotiating prescription drug prices for the first time ever, and that negotiation could save beneficiaries up to 50% on their prescriptions.

News about these negotiated prices is slow to spread, so here's what you need to know if you have Medicare coverage.

Why Medicare can negotiate prices

When President Biden signed the Inflation Reduction Act into law in 2022, the Act authorized the government to negotiate the prices of some medications that Medicare covers. Before the Act was signed, Medicare had to use commercial prices and could not negotiate on the program's behalf.

Under the Act and its Medicare Drug Price Negotiation Program, the Secretary of the U.S. Department of Health and Human Services can now negotiate prices with pharmaceutical manufacturers for specific medications. Each year, certain drugs are selected for negotiation, and the number of drugs negotiated annually is scheduled to increase. The first negotiations for 10 medications covered by Medicare Part D began in 2023.

The 10 medications available at lower negotiated prices

The first 10 medications negotiated include Eliquis, Enbrel, Entresto, Farxiga, Fiasp, Imbruvica, Januvia, Jardiance, Stelara, and Xarelto. Medicare Part D covers all of these medications. The FDA has approved or licensed all of them for at least seven years. According to the U.S. Department of Health and Human Services, these medications, including blood thinners and diabetes treatments, accounted for about 20% of Medicare's pharmacy costs.

The negotiated prices for these first 10 medications went into effect on Jan. 1, 2026.

Additional medications to be negotiated by Medicare

The next round of negotiations will include 15 medications, including Linzess, Austedo, Ibrance, Otezla, and Tradjenta. Those negotiated prices are confirmed to go into effect on Jan. 1, 2027.

The third round of Medicare drug price negotiations will bring some new changes. For the first time, the Centers for Medicare & Medicaid Services (CMS) selected drugs covered by both Medicare Part B and Part D. It also includes the program's first attempt to renegotiate a drug that was already negotiated in an earlier round. CMS selected 15 drugs in January 2026, with the new prices set to take effect Jan. 1, 2028.

How the negotiations can help Medicare enrollees save

CMS estimates that, if the second-round prices set to take effect in 2027 had been in place in 2024, they would have reduced net covered drug costs by $8.5 billion, or about 36%. That's different from the $685 million in estimated out-of-pocket savings for Medicare beneficiaries in 2027.

The $8.5 billion figure measures savings in overall Medicare drug spending under a hypothetical 2024 scenario, while the $685 million estimates how much people with Medicare prescription drug coverage could save out of pocket in 2027.

How much an individual Medicare enrollee saves will depend on factors such as which medications they take, whether they have Medicare Part D coverage, and their plan's cost-sharing rules. The negotiated prices also vary by medication. For example, the negotiated price for Januvia, a Type 2 diabetes medication, is about 79% lower than its 2023 list price. The negotiated price for Eliquis, which is used to help prevent blood clots and strokes, is about 56% lower than its 2023 list price.

What the annual out-of-pocket cap means for Medicare enrollees

The annual out-of-pocket cap may help certain Medicare enrollees save more on medications than the new negotiated prices would. In 2024, enrollees with Medicare Part D prescription plans had to spend at least $8,000 on covered medications before they reached the catastrophic coverage phase, when they would pay no more out-of-pocket costs.

A provision in the Inflation Reduction Act dropped that cap to $2,000 in 2025, helping reduce prescription medication costs for individuals with Medicare Part D. In 2026, that cap increased slightly to $2,100, meaning once Part D enrollees meet their deductible and spend $2,100 in covered medications, they don't have additional out-of-pocket costs for the rest of the year. Any medications they buy for the rest of the year would be $0.

The importance of negotiated medication prices

Affording medication can be stressful, especially for individuals who rely on more expensive medications to manage chronic health conditions. Negotiated prices may give some Medicare enrollees relief. It may also encourage better medication adherence, including taking medication as prescribed and not skipping doses. When people can better afford their medications, adherence becomes easier.

Potential downsides to Medicare medication negotiation

The Medicare medication negotiation has potential downsides and has received criticism. The negotiation focuses on medications used frequently to treat chronically ill patients, rather than focusing on particularly high-priced medications. Because the out-of-pocket cap helps enrollees save money on medications, drug price negotiation may be seen as an effort to save the Medicare program money rather than to save enrollees money.

AbbVie is also challenging CMS's decision to include Botox in the Medicare drug negotiation program. The company filed a lawsuit in February 2026, arguing that Botox should not be eligible for negotiation and raising other legal challenges.

The case is still pending. As of September 2026, AbbVie and the federal government have filed motions for summary judgment, and a hearing is scheduled for Sept. 25. The court has not yet issued a final decision.

Bottom line

The news of even more medication negotiations is encouraging, but you may save more from the out-of-pocket cost cap. If you're worried about medication costs, review your Medicare coverage to confirm you've chosen a plan that works for your needs. Speak with your doctor, too, since you may be able to apply for a manufacturer assistance program to help with the cost.

Check your medication list to see if any of your medications were included in the negotiated list. If so, you may see a lower price at the pharmacy, which could also ease your financial stress. 

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