IRA Medicare Drug Price Negotiation Explained: All 10 Drugs, Maximum Fair Prices, and What It Means for You in 2026

The Inflation Reduction Act (IRA), signed by President Biden on August 16, 2022, as Public Law 117-169, marked the first time in Medicare's 57-year history that the federal government gained statutory authority to negotiate drug prices directly with pharmaceutical manufacturers. Sections 11001 and 11002 of the IRA added sections 1191 through 1198 to the Social Security Act, creating the Medicare Drug Price Negotiation Program. The Centers for Medicare and Medicaid Services (CMS) administers the program, and the resulting prices are called Maximum Fair Prices (MFPs). All Medicare Part D plans, including stand-alone Prescription Drug Plans and Medicare Advantage Prescription Drug plans, are required by federal law to apply the MFP for covered selected drugs at the pharmacy counter.

The ten drugs selected for Round 1 (Initial Price Applicability Year 2026) were chosen from among the highest-spending Part D drugs that had been on the market without generic or biosimilar competition for at least 9 years (for small-molecule drugs) or 13 years (for biologics). Together, these 10 drugs accounted for approximately $46.4 billion in Medicare Part D spending in 2022, representing 19 percent of all Part D gross covered drug costs. The negotiated Maximum Fair Prices, effective January 1, 2026, reduce prices by 38 to 79 percent from the pre-negotiation list price, saving Medicare Part D enrollees an estimated $1.5 billion in out-of-pocket costs in 2026 alone, and saving the Medicare program approximately $6 billion per year. Patients with Medicare Part D do not need to take any action. The benefit is automatic at any network pharmacy when filling a prescription for one of the 10 selected drugs.

Round 2 of the IRA drug price negotiation program covers 15 additional Part D drugs for Initial Price Applicability Year 2027. The MFPs for Round 2 drugs become effective January 1, 2027. The Round 2 list includes semaglutide products (Ozempic at $274 per month, Rybelsus at $274 per month, Wegovy at $274 to $385 per month depending on dose), representing discounts of 71 to 80 percent from current list prices. Other Round 2 drugs include Trelegy Ellipta ($305 per month), Repatha ($620 per month), Vraylar ($565 per month), Nurtec ODT ($538 per month), Kerendia ($372 per month), Nucala ($2,150 per month), Cosentyx ($3,980 per month), Calquence ($9,531 per month), Dupixent ($2,459 per month), Rinvoq ($4,100 per month), Biktarvy ($2,700 per month), and Skyrizi ($4,098 per month). A third round of 15 drugs, including the first-ever Part B drugs selected for negotiation, was announced by CMS in January 2026 with prices effective January 1, 2028. For patients currently on Ozempic or Wegovy under Medicare Part D, the negotiated price takes effect January 1, 2027. Until then, the general $2,100 annual Part D out-of-pocket cap applies.

What IRA Drug Negotiation Costs by Point of Pay (2026)

The price you pay depends almost entirely on WHERE you pay. The same ira drug negotiation can cost many times more at a hospital than at your local pharmacy:

Why Hospitals Charge So Much

When patients receive IRA-negotiated drugs during a hospital inpatient stay, the Maximum Fair Price does not directly cap what the hospital charges. The MFP governs the outpatient Medicare Part D benefit, not the Medicare Part A inpatient benefit. During an inpatient stay, drugs are bundled into the Diagnosis-Related Group (DRG) payment that Medicare Part A pays the hospital for the entire admission. Hospitals do not bill individually for each drug dispensed during an inpatient stay under Medicare Part A. This means a patient may pay relatively little in Part A cost-sharing for a hospital stay that involves an expensive negotiated drug, but the drug's actual cost is absorbed in the DRG rate.

Patients who transition from an inpatient hospital stay to outpatient management will encounter the MFP when filling their prescriptions at an outpatient pharmacy under Medicare Part D. That transition from Part A inpatient billing to Part D outpatient billing is a common source of billing confusion. A patient discharged from the hospital without active Part D coverage who tries to fill a negotiated-drug prescription at retail may pay the full cash price. Patients discharged from a hospital without Part D coverage should call 1-800-MEDICARE immediately to explore late-enrollment options, and should ask their discharge planner about the Medicare Prescription Payment Plan, which spreads Part D out-of-pocket costs evenly across the benefit year rather than requiring a large upfront payment.

For Medicare Part B drugs (administered in a physician office or clinic setting), the Maximum Fair Price framework does not currently apply to most of the 10 Round-1 drugs, which are all Part D drugs. However, CMS announced in January 2026 that Round 3 (IPAY 2028) includes the first Part B drugs selected for negotiation. Patients receiving Part B drugs pay 20 percent coinsurance after the 2026 Part B deductible of $283. Patients with Medigap (Medicare Supplement Insurance) plans typically have this 20 percent covered by their supplement. For Part B drugs, the relevant cost benchmark is the Average Sales Price (ASP), published quarterly by CMS. Part B and Part D interact in complex ways for patients with both types of drug coverage, and patients in this situation should review their Explanation of Benefits carefully to ensure billing accuracy.

Patient Assistance Programs

For Medicare Part D enrollees, the Maximum Fair Price is the primary cost-reduction mechanism and no separate application is required. For patients without Medicare who take one of the 10 negotiated drugs, manufacturer patient assistance programs remain the main route to free or reduced-cost medication. Each of the 10 Round-1 drugs has a manufacturer-operated program. IMPORTANT: Federal anti-kickback statute (42 U.S.C. Section 1320a-7b) prohibits manufacturer copay coupons and savings cards from being used by patients with Medicare, Medicaid, TRICARE, or VA coverage. Medicare Part D enrollees must use the IRA MFP and cannot stack manufacturer coupons on top of it. Uninsured patients below 300 to 400 percent of the Federal Poverty Level should contact the relevant manufacturer's patient assistance program directly. The income thresholds and program details for each drug's PAP vary; see the individual drug pages linked below for program-specific eligibility, application steps, and income tables.

Medicare Part D

Medicare Part D is the outpatient prescription drug benefit that covers the 10 Round-1 IRA-negotiated drugs. For 2026, the annual out-of-pocket cap for all Part D drugs combined is $2,100, established by the Inflation Reduction Act. Once a beneficiary reaches $2,100 in Part D out-of-pocket spending in a calendar year, all covered drugs cost $0 for the rest of the year, including any of the 10 negotiated drugs. Before reaching the cap, patients with coinsurance-based Part D plans pay a percentage of the MFP (not the list price) as their share. Patients on flat-copay Part D plans may not see the full benefit of the MFP reflected in their copay, though the plan's cost is still capped at the MFP. Patients should review their plan's formulary tier placement for each negotiated drug to understand their specific cost-sharing structure.

Medicare Part D plans are required to cover all dosage forms and strengths of each IRA-selected drug, which was a new coverage mandate introduced by the IRA. Previously, plans could exclude certain strengths or forms. This enhanced coverage mandate means that patients who switch from one dose strength to another (for example, switching Eliquis from 2.5mg to 5mg) cannot be denied Part D coverage on the grounds that their specific dose is not on formulary. All formulary tier placements for negotiated drugs must be disclosed in the plan's Annual Notice of Change. Patients who receive a notice that a negotiated drug is being moved to a higher formulary tier or requires prior authorization should contact their plan immediately to confirm the IRA mandatory coverage rules apply.

The Medicare Prescription Payment Plan, available starting in 2025, allows Part D enrollees to spread their out-of-pocket costs evenly across the calendar year rather than paying large amounts upfront in a single month. This is particularly relevant for patients whose negotiated drugs are still expensive even at the MFP level (for example, Imbruvica at $9,319 per month MFP, or Stelara at $4,695 per month MFP). Patients taking these high-cost drugs can enroll in the Medicare Prescription Payment Plan to smooth out costs across 12 equal monthly installments. Enrollment occurs through your Part D plan. The Prescription Payment Plan does not reduce the total amount owed but makes it more predictable and avoids large single-month pharmacy bills that could disrupt household budgets.

Common IRA Drug Negotiation Billing Errors

Since the 10 IRA-negotiated Maximum Fair Prices took effect January 1, 2026, CMS and patient advocacy organizations have documented several billing errors at the pharmacy and plan level. If you take one of the 10 negotiated drugs under Medicare Part D, check for these issues before paying:

• Pharmacy charged the list price instead of the Maximum Fair Price: The MFP is a mandatory ceiling. If you are charged more than the MFP at a network pharmacy, the pharmacy must adjust the charge. Call your Part D plan's Member Services to report the discrepancy and request a corrected Explanation of Benefits.
• Part D plan applied prior authorization to a negotiated drug: Under the IRA mandatory coverage rules, all dosage forms and strengths of negotiated drugs must be covered. Plans may not apply prior authorization or step therapy requirements that effectively block access to the negotiated drug. File an expedited appeal with your plan if prior authorization is imposed.
• Manufacturer copay card applied to a Medicare claim: Federal anti-kickback statute bars manufacturer coupons for Medicare beneficiaries. If a pharmacy or plan representative suggests stacking a manufacturer coupon with your Medicare Part D benefit for a negotiated drug, this is not permissible. The IRA MFP is the correct and only applicable price for Medicare Part D patients.
• Cost-sharing was not counted toward the $2,100 Part D annual out-of-pocket cap: All Part D cost-sharing, including amounts paid for negotiated drugs at the MFP level, must count toward the 2026 annual OOP cap of $2,100. If your Explanation of Benefits shows out-of-pocket spending that is not accumulating toward the cap, contact your plan immediately.
• Extra Help beneficiary charged more than $12.65 for a brand-name negotiated drug: Patients enrolled in the Low Income Subsidy (Extra Help) program pay fixed copays: $5.10 per generic and $12.65 per brand-name drug in 2026. If you are an Extra Help enrollee and are charged more than $12.65 for a negotiated brand-name drug, request a corrected claim from your plan.

Frequently Asked Questions