Medicare Is Now Negotiating Drug Prices — Here’s How Much You Could Save on 10 Common Medications

WASHINGTON, APRIL 14, 2026 —

Key Takeaways

• For the first time in Medicare’s history, the federal government has negotiated lower drug prices directly with pharmaceutical companies — and those prices took effect January 1, 2026, covering 10 widely used medications.
• The average out-of-pocket cost reduction is 51% for the 10 negotiated drugs, with some medications dropping by as much as 79% compared to their 2023 list prices.
• Nearly 9 million Medicare Part D enrollees stand to save an estimated $1.5 billion in 2026 — with 15 more drugs, including Ozempic, set to get negotiated prices in 2027.

For decades, Medicare was legally prohibited from doing what every other major health insurance system in the developed world does as a matter of routine: negotiate directly with drug companies to bring prices down. That changed. And in 2026, for the first time, millions of Americans with Medicare are seeing the result show up on their pharmacy receipts.

Ten of the most expensive and most widely used Medicare Part D drugs now carry federally negotiated prices — reductions that are not contingent on income, plan type, or prior authorization. If you take any of these medications and are enrolled in a Medicare drug plan, the savings are automatic.

Which Drugs Are Covered and How Much Cheaper Are They

The ten drugs selected for the first round of negotiations treat some of the most common and costly chronic conditions in America — diabetes, heart disease, blood clots, autoimmune disorders, kidney disease, and cancer. They were chosen specifically because they carry no generic or biosimilar competition, meaning patients had no lower-cost alternatives and were entirely dependent on the brand-name list price.

The diabetes drug Januvia’s reduction from $527 to $113 for a 30-day supply is among the most dramatic — a nearly 80% price cut for one of the most commonly prescribed medications among older Americans. Medicare spent over $4 billion on Januvia alone in 2023. For Eliquis — the blood thinner used by nearly 4 million Medicare beneficiaries that cost the program $18.3 billion in 2023 — the negotiated price cuts the monthly bill nearly in half.

What This Means for Your Wallet Right Now

Seven of the ten negotiated drugs are now available for under $100 per month for many Part D enrollees — a threshold that represents meaningful relief for the millions of seniors on fixed incomes who have been rationing or skipping doses because of cost.

The savings are not uniform across every plan. Medicare Advantage plans with drug coverage and stand-alone Part D plans are all required to offer the negotiated prices, but cost-sharing arrangements vary by plan design. A beneficiary in one plan may see a different copay than someone in an identical income situation in a different plan — which means comparing your specific plan’s cost-sharing structure matters more than ever.

The out-of-pocket cap for Medicare Part D is $2,100 in 2026 — up from $2,000 last year. That cap means that even for the most expensive drugs like Enbrel, Imbruvica, or Stelara, no Part D enrollee will pay more than $2,100 total out of pocket on covered prescription drugs for the entire year. For patients on oncology drugs or biologics that previously carried annual out-of-pocket exposure in the tens of thousands of dollars, this cap is genuinely life-changing.

What Comes Next — and Why It Gets Better

The ten drugs now at negotiated prices are only the beginning. A second round of negotiations covering 15 additional drugs — including blockbuster diabetes and weight-loss medications — concluded in 2025, and those negotiated prices take effect January 1, 2027. The government estimates those 15 drugs will generate savings of $8.5 billion to $12 billion annually when the new prices kick in, with beneficiaries saving an additional $685 million out of pocket.

The third round — announced in early 2026 — covers 15 more drugs including the first-ever negotiations for Part B drugs, which are physician-administered medications given in doctors’ offices or infusion centers. Those prices take effect in 2028. By 2029 and beyond, 20 drugs per year will be added to the negotiated list on a rolling basis.

Drug companies filed legal challenges arguing the negotiations amounted to forced price-setting. The courts have largely rejected those arguments, allowing the program to proceed as Congress designed it.

Pro Tips a Generic Article Would Miss

1. The negotiated price only applies to your Medicare Part D plan — not private employer insurance. If you are on a retiree plan through a former employer, or covered under a spouse’s private insurance, you cannot access the Medicare negotiated price through that coverage. You would need to be enrolled in a Part D plan to benefit.

2. Your current plan may not offer the lowest cost-sharing on these drugs. The negotiated price sets a ceiling — meaning plans cannot charge more than the negotiated price — but different plans structure their cost-sharing differently. Review your plan’s formulary to see which tier these drugs fall on and whether a different plan would cost you less overall.

3. The $2,100 annual out-of-pocket cap resets every January 1. If you take a very expensive drug and hit that cap by spring, the remaining months of the year are effectively free for covered drugs. Knowing exactly when you hit your cap can help you plan around large refills, specialty medications, and discretionary prescriptions.

Actionable Step

Pull up your Medicare Summary Notice or log into your Medicare account online to verify which Part D plan you are currently enrolled in. Then, for each of your current medications, compare your plan’s cost-sharing on the negotiated drugs against at least two other available plans in your area. Medicare’s annual open enrollment period runs from October 15 through December 7 — but reviewing your plan’s costs now tells you exactly how much you are currently leaving on the table and whether a switch at the next enrollment period would save you money.