Medicare Drug Price Negotiations Deliver Major Savings: 25 Medications to See Reduced Costs by 2027
Key Insights
Medicare (search) Part D enrollees will see out-of-pocket costs for the first 10 negotiated drugs fall by an average of more than 50% starting January 1, 2026, with potential savings of $1.5 billion.
An additional 15 high-cost prescription drugs will have reduced prices beginning in 2027, projected to save Medicare (search) beneficiaries about $685 million in out-of-pocket costs.
The negotiated drugs treat major conditions including cancer, diabetes, autoimmune diseases, and heart disease, with some medications like Stelara showing cost reductions of up to 68%.
The Medicare (search) Drug Price Negotiation Program is delivering substantial cost savings for older Americans, with the first wave of negotiated drug prices taking effect January 1, 2026, and a second round of price reductions scheduled for 2027.
First Round of Negotiations Shows Dramatic Savings
Medicare (search) Part D enrollees using the first 10 drugs subject to price negotiations will see their out-of-pocket costs fall by an average of more than 50% in 2026, according to new research from AARP (search). About 9 million Medicare Part D enrollees use these prescription drugs, which treat conditions including autoimmune diseases, cancer, diabetes, and heart disease.
The Centers for Medicare & Medicaid Services (search) estimates that these price negotiations may save Medicare (search) Part D enrollees $1.5 billion in out-of-pocket expenses in 2026. Enrollees may pay less than $100 per month for 7 of the 10 negotiated drugs next year, AARP (search)'s research found.
Significant Cost Reductions for High-Priced Medications
The drug offering the biggest dollar cost reduction is Stelara, used to treat autoimmune conditions. Average monthly enrollee costs for that treatment may drop by $5,046 — or 68% — in 2026, from $7,425 to $2,379 per month based on AARP (search)'s analysis.
Cancer therapy Imbruvica and Enbrel, a treatment for autoimmune diseases, round out the top three for most significant price drops, potentially saving patients more than $1,000 per month. Imbruvica costs are projected to fall from $4,983 to $2,813 monthly (44% reduction), while Enbrel may drop from $2,265 to $619 per month (73% reduction).
Other notable reductions include:
- Farxiga (diabetes and heart disease): $141 to $39 monthly (73% savings)
- Jardiance (diabetes): $103 to $43 monthly (58% savings)
- Eliquis (blood clots): $110 to $51 monthly (53% savings)
- Xarelto (blood clots): $103 to $45 monthly (56% savings)
Second Round Targets 15 Additional High-Cost Drugs
In November 2025, CMS announced negotiated maximum fair prices for 15 additional high-cost prescription drugs, which will take effect January 1, 2027. These drugs were selected because they account for approximately 15% of Medicare (search) Part D spending, totaling about $42.5 billion in 2024.
About 5.3 million Medicare (search) Part D enrollees used these drugs during 2024 to treat various conditions including cancer, asthma, and diabetes. CMS projects a net savings of about 44% compared with 2024 spending, amounting to roughly $12 billion in federal savings and about $685 million in out-of-pocket savings for Medicare beneficiaries.
2027 Drug List Includes Popular Medications
The 15 drugs receiving price reductions in 2027 include several widely-used medications:
Diabetes and Weight Management:
- Ozempic, Rybelsus, Wegovy (Type 2 diabetes, cardiovascular disease, obesity)
- Tradjenta (Type 2 diabetes)
- Janumet, Janumet XR (Type 2 diabetes)
Cancer Treatments:
- Xtandi (prostate cancer)
- Pomalyst (Kaposi sarcoma, multiple myeloma)
- Ibrance (breast cancer)
- Calquence (chronic lymphocytic leukemia, mantle cell lymphoma)
Respiratory Conditions:
- Trelegy Ellipta (asthma, chronic obstructive pulmonary disease)
- Breo Ellipta (asthma, chronic obstructive pulmonary disease)
Other Conditions:
- Ofev (idiopathic pulmonary fibrosis)
- Linzess (chronic constipation, irritable bowel syndrome)
- Austedo, Austedo XR (Huntington's disease, tardive dyskinesia)
- Xifaxan (hepatic encephalopathy, irritable bowel syndrome)
- Vraylar (bipolar disorder, major depressive disorder, schizophrenia)
- Otezla, Otezla XR (Behçet's disease, plaque psoriasis, psoriatic arthritis)
Program Implementation and Future Impact
The Medicare (search) Drug Price Negotiation Program was enacted through the Inflation Reduction Act in 2022. Nancy LeaMond, chief advocacy and engagement officer at AARP (search), emphasized the human impact during a December briefing: "Beyond the numbers, this is about the people in our lives, parents, grandparents, friends and neighbors, who will finally see relief from the high drug costs and the fear that the price of needed medications will spiral out of control."
The Inflation Reduction Act also established a $2,100 annual out-of-pocket spending cap for Medicare (search) Part D beneficiaries in 2026, up from $2,000 in 2025. Once spending reaches that limit, the plan pays 100% for the rest of the year. Additional provisions include a $35 monthly cap on insulin for Medicare beneficiaries and rebates if drug prices rise faster than inflation.
By 2027, a total of 25 drugs will be under negotiated pricing, with more expected in future negotiation cycles. The program focuses on expensive, single-source medications with no generic or biosimilar competition, potentially creating systemic pressure to develop alternative treatments and restrict price increases across the pharmaceutical industry.