For more than two decades, a provision of federal law explicitly prohibited Medicare from negotiating prescription drug prices with pharmaceutical manufacturers. The Department of Veterans Affairs could negotiate. Medicaid could negotiate. Private insurers could negotiate. Medicare — the program covering 67 million Americans, the largest purchaser of prescription drugs in the country — could not.
The Inflation Reduction Act of 2022 ended that prohibition. And in 2026, the first round of negotiated prices took effect for Medicare beneficiaries.
The First 10 Drugs
The law allowed Medicare to begin negotiations with a small number of high-cost, widely used drugs with no generic or biosimilar competitors. The first ten drugs selected included some of the most commonly prescribed in the country:
- Eliquis (apixaban) — one of the most prescribed blood thinners, widely used to prevent stroke in people with atrial fibrillation
- Jardiance — used for type 2 diabetes and heart failure
- Xarelto — another blood thinner used for stroke prevention and blood clot treatment
- Januvia — a widely used diabetes medication
- Farxiga — used for diabetes, heart failure, and kidney disease
- Entresto — for heart failure
- Enbrel — used for rheumatoid arthritis and other inflammatory conditions
- Imbruvica — for certain blood cancers
- Stelara — for autoimmune conditions
- Fiasp and NovoLog insulin products
These are not obscure drugs. Eliquis alone is taken by millions of Americans, many of them seniors. Annual Medicare spending on just these ten drugs exceeded $50 billion in recent years.
What the Negotiated Prices Look Like
The negotiated prices represent significant reductions from what Medicare was previously paying. Reductions ranged from roughly 38 percent to 79 percent off the previous list prices, depending on the drug.
For beneficiaries, this translates to lower out-of-pocket costs, particularly for those who reach the coverage gap or rely on these drugs as daily maintenance medications. A senior on a fixed income who takes Eliquis every day for atrial fibrillation — a very common scenario — could see meaningful annual savings compared to prior years.
The reductions also interact with the Inflation Reduction Act's $2,000 annual cap on Medicare Part D out-of-pocket spending, which also took effect in 2026. For seniors on multiple expensive medications, the combination of negotiated prices and the hard annual cap represents a qualitative change in how predictable and manageable drug costs are.
What Comes Next
The law doesn't stop at ten drugs. Medicare is authorized to add more drugs to the negotiation process in subsequent years — up to 15 more for 2027, 15 more for 2028, and 20 more per year starting in 2029. Each round focuses on drugs with high Medicare spending, no generics, and significant time since original FDA approval.
The pharmaceutical industry challenged the program in courts, but so far those challenges have not stopped it from taking effect. The negotiation process continues.
Why This Matters Beyond the Numbers
Drug pricing in the United States has been one of the most intractable policy problems in American healthcare for decades. The United States consistently pays dramatically more for the same drugs than peer countries — often two to four times as much.
The first round of negotiations doesn't close that gap. But it establishes the principle that the federal government can, and will, negotiate on behalf of its beneficiaries. For the millions of seniors who make daily decisions about whether to fill prescriptions they need, that's not a small thing.
You can check whether your medications are on the negotiated list and what your expected costs are at Medicare.gov.