Medicare Drug Negotiations: A Prescription for Savings, Delivering $1.5 Billion in Relief to Enrollees
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Medicare Negotiates Down Prices for Popular Prescription Drugs
Medicare has negotiated down the prices for several popular prescription drugs for the first time ever, resulting in steep discounts for millions of enrollees.
The Details of the Negotiations
The Biden administration on Thursday unveiled the outcome of Medicare’s first round of negotiations for 10 drugs used to treat diabetes, arthritis, heart failure, cancer and other conditions. The discounts will save the Medicare program a total of $6 billion, and beneficiaries will save an estimated $1.5 billion on out-of-pocket costs starting in 2026, according to the Centers for Medicare & Medicaid Services (CMS).
President Biden’s Statement
“For years, millions of Americans were forced to choose between paying for medications or putting food on the table,” President Joe Biden said in an announcement. “Big Pharma blocked Medicare from being able to negotiate prices on behalf of seniors and people with disabilities. But we fought back and won.”
The Impact on Medicare Enrollees
About 8.8 million Americans in Medicare are prescribed at least one of the 10 discounted drugs, according to government estimates. That works out to an average savings of about $170 per person in 2026, when the new prices are enacted. All enrollees stand to benefit, however, as the $6 billion in overall Medicare cost savings will result in efficiencies to the program, officials said in a briefing with reporters.
Why Medicare is Negotiating Prescription Drug Prices
The price negotiations were mandated by the Inflation Reduction Act, a sprawling health and climate spending package passed in 2022. The law allowed Medicare to identify 100 high-cost drugs without generic alternatives and begin negotiating with drug makers to bring prices down.
Which Drugs are Getting Cheaper
The 10 drugs that were selected for this first round of negotiations are blockbuster drugs, costing Medicare over $56 billion last year or about 20% of the program’s total spending on prescription drugs.
The Discounted Prices
The negotiations yielded discounts ranging from 79% on the diabetes drug Januvia to 38% for a blood cancer treatment called Imbruvica. Here’s a list of all 10 drugs and their discounted prices:
- Januvia (treats diabetes): 79% discount
- Fiasp (diabetes): 76% discount
- Farxiga (diabetes, heart failure, kidney disease): 68% discount
- Enbrel (rheumatoid and psoriatic arthritis): 67% discount
- Jardiance (diabetes, heart failure, kidney disease): 66% discount
- Stelara (psoriasis, arthritis, bowel diseases): 66% discount
- Xarelto (blood clots, heart diseases): 62% discount
- Eliquis (blood clots): 56% discount
- Entresto (heart failure): 53% discount
- Imbruvica (blood cancers): 38% discount
Next Steps
The lower prices will go into effect for Medicare Part D beneficiaries in January 2026. Starting in February, Medicare will begin the same negotiation process for 15 additional high-cost drugs. The following year, the same goes for another 15 drugs, and up to 20 drugs will be negotiated in 2027 and onward.
CMS Administrator’s Statement
“These negotiated prices — they’re not just about costs,” CMS Administrator Chiquita Brooks-LaSure said on a call with reporters. “They are about helping to make sure that your aunt, your father, your grandfather or you live longer and healthier.”
