Medicare spent decades barred by federal law from directly negotiating what it pays for prescription drugs, even while covering more than 65 million people. The Inflation Reduction Act, signed August 16, 2022, ended that ban for a limited set of high-cost drugs. On January 1, 2026, the Centers for Medicare & Medicaid Services put the first negotiated prices into effect on 10 widely used medications, from the blood thinner Eliquis to the diabetes drug Jardiance.
The sections below explain exactly what changed in 2026, which drugs are covered now, what happens in 2027 and 2028, who is still excluded, and how the negotiated Maximum Fair Price shows up (or does not) in your own pharmacy bill. For the broader Part D benefit, see does Medicare cover prescription drugs. To check whether you qualify for a Part D plan, see Medicare Part D eligibility.
Coverage Breakdown
Direct Answer
Yes. Medicare gained the legal authority to negotiate drug prices under the 2022 Inflation Reduction Act, and the first negotiated Maximum Fair Prices took effect January 1, 2026, for 10 high-cost drugs covered under Part D. A second group of 15 drugs will get negotiated prices in 2027, and negotiations now include Part B drugs starting with the round effective in 2028.
How the Medicare Drug Price Negotiation Program Works
The Inflation Reduction Act created the Medicare Drug Price Negotiation Program inside the Centers for Medicare & Medicaid Services, giving the agency authority it never had before: the power to set a ceiling price, called the Maximum Fair Price, for specific drugs covered under Medicare. CMS selects drugs based on Medicare spending and years on the market, then negotiates directly with each manufacturer over several months using confidential financial and clinical data. Manufacturers that refuse to negotiate in good faith face a steep excise tax of up to 95% of that drug's U.S. sales, or they must pull every one of their products out of both Medicare and Medicaid entirely.
Congress designed the program to run in yearly cycles rather than negotiate every drug at once. Ten Part D drugs went through the first cycle, with Maximum Fair Prices published in August 2024 and taking effect January 1, 2026. Fifteen more Part D drugs followed in a second cycle, with prices set for January 1, 2027. A third cycle, announced in January 2026, folds in Medicare Part B drugs for the first time, with those prices effective January 1, 2028.
The 10 Drugs With Negotiated Prices in 2026
Medicare's first negotiated Maximum Fair Prices apply to 10 drugs that together accounted for $56.2 billion in Part D spending, roughly 20% of all Part D drug costs, in the year CMS used to select them. CMS reported the negotiated 2026 prices are 38% to 79% lower than each drug's list price, and the agency projects the changes will save the Medicare program about $6 billion and save an estimated 9 million beneficiaries roughly $1.5 billion in out-of-pocket costs during 2026 alone.
- Eliquis (apixaban), Bristol Myers Squibb/Pfizer, for blood clots and stroke prevention
- Jardiance (empagliflozin), Boehringer Ingelheim, for type 2 diabetes and heart failure
- Xarelto (rivaroxaban), Janssen, for blood clots and stroke prevention
- Januvia (sitagliptin), Merck, for type 2 diabetes
- Farxiga (dapagliflozin), AstraZeneca, for type 2 diabetes, heart failure, and kidney disease
- Entresto (sacubitril/valsartan), Novartis, for heart failure
- Enbrel (etanercept), Amgen, for rheumatoid arthritis and psoriasis
- Imbruvica (ibrutinib), AbbVie/Janssen, for blood cancers
- Stelara (ustekinumab), Janssen, for psoriasis and Crohn's disease
- Fiasp and NovoLog (insulin aspart), Novo Nordisk, for diabetes
How the Negotiated Price Affects What You Pay
Original Medicare beneficiaries enrolled in a standalone Part D plan see the negotiated Maximum Fair Price built into their pharmacy claim automatically; no separate application or enrollment step is required. Medicare Advantage prescription drug plans must apply the same negotiated price as standalone Part D plans, so the plan type you choose during enrollment does not change your access to the lower price. Medicare Part A, which covers hospital stays, does not pay for outpatient prescriptions at all, so it plays no role here; Medigap policies never covered prescription drugs either, so the negotiation program has no direct effect on a Medigap premium or benefit.
Coinsurance and copays are calculated as a percentage of the negotiated price rather than the old list price, which lowers costs during the deductible and initial coverage phases of the Part D benefit. The 2026 Part D annual out-of-pocket cap of $2,100 still applies on top of those savings, capping what any Part D enrollee pays even for a drug not yet on the negotiated list. Commercial insurance, employer plans, and Medicaid do not use the Medicare negotiated price; federal law specifically bars treating the Maximum Fair Price as a Medicaid best-price benchmark, so state Medicaid rebates are calculated separately.
What's Next: 2027, 2028, and Beyond
Fifteen additional Part D drugs move to negotiated pricing on January 1, 2027, a group that includes the GLP-1 drugs Ozempic and Wegovy (semaglutide) alongside cancer, diabetes, and asthma medications. CMS estimates roughly 5.3 million Part D enrollees used these 15 drugs in 2024, spending $42.5 billion combined, and projects about $685 million in beneficiary out-of-pocket savings once the 2027 prices take hold.
January 1, 2028 brings the third negotiation cycle into effect, marking the first time Medicare Part B physician-administered drugs, given in a clinic or infusion center, join the program alongside Part D. CMS selected 15 drugs for this cycle in January 2026, spanning oncology, respiratory, cardiometabolic, and immunology treatments that together represent about $27 billion in combined Part B and Part D spending. Starting in 2029, up to 20 additional drugs join the negotiated list every year, drawn from a combined Part B and Part D pool.
Which Drugs Qualify for Negotiation (and Which Don't)
CMS can only select a drug once it has been on the market long enough to have earned back its research investment without facing generic or biosimilar competition: at least 7 years since FDA approval for small-molecule pills, or at least 11 years since licensure for biologics. The drug must also rank among the highest-spending medications under Medicare Part B and Part D combined, with the qualifying spending threshold set above $200 million a year and adjusted for inflation.
Several categories stay off the list regardless of spending. Orphan drugs approved to treat only a single rare disease are excluded, and a 2025 reconciliation law widened that exclusion, which is why blockbuster cancer immunotherapies like Keytruda and Opdivo were not selected in the early cycles. Drugs that already face generic or biosimilar competition, plasma-derived products, and drugs from small biotech companies representing a tiny share of total Medicare spending are also excluded, though the small biotech exemption is temporary.
Legal Challenges: Where the Program Stands in 2026
Pharmaceutical manufacturers and trade groups, including PhRMA, Boehringer Ingelheim, AstraZeneca, and others, filed multiple federal lawsuits arguing the negotiation program violates the Fifth Amendment's takings clause and the First Amendment by compelling manufacturers to 'agree' to a government-set price. Federal district courts rejected those arguments in every case that reached a decision, and appeals courts, including the Fifth Circuit and the Second Circuit, upheld the program's constitutionality on review.
The U.S. Supreme Court declined to hear the manufacturers' appeals in May 2026, leaving the lower court rulings in place without further review. That decision means the Medicare Drug Price Negotiation Program is on solid legal footing heading into its 2027 and 2028 expansion cycles, though manufacturers of newly selected drugs retain the right to file fresh challenges as each cycle proceeds.
Frequently Asked Questions
Which 10 drugs got negotiated Medicare prices in 2026?
The first 10 drugs are Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and Fiasp/NovoLog. CMS negotiated Maximum Fair Prices for all 10 that are 38% to 79% below list price, and those prices took effect for Medicare Part D claims on January 1, 2026.
Does the negotiated price apply if I have a Medicare Advantage plan?
Yes. Medicare Advantage prescription drug plans (MA-PD) must apply the same Maximum Fair Price as standalone Part D plans for the 10 negotiated drugs. There is no separate negotiation for Medicare Advantage; CMS negotiates one national price per drug that every Part D and MA-PD plan must honor.
How much will I actually save on a negotiated drug in 2026?
Savings depend on which phase of the Part D benefit you are in and your plan's cost-sharing structure, but CMS projects the 2026 negotiated prices will save about 9 million beneficiaries roughly $1.5 billion in out-of-pocket costs combined. Because coinsurance is a percentage of the negotiated price rather than the list price, your per-fill cost during the deductible and initial coverage phases should drop even if your plan's formulary tier stays the same.
What drugs get negotiated prices in 2027?
Fifteen more Part D drugs move to negotiated pricing on January 1, 2027, including the GLP-1 medications Ozempic and Wegovy (semaglutide) plus treatments for cancer, diabetes, and asthma. CMS estimates these 15 drugs will save Part D enrollees about $685 million in out-of-pocket costs once the 2027 prices take effect.
Does Medicare negotiate Part B drug prices yet?
Not in 2026. Part B covers drugs administered by a doctor, such as infusions and injections, and those drugs first join the negotiation program in the third cycle, with prices effective January 1, 2028. CMS selected 15 Part B and Part D drugs for that cycle in January 2026.
Why aren't drugs like Keytruda and Opdivo on the negotiated list?
Keytruda and Opdivo qualify as orphan drugs for some of their approved uses, and a 2025 reconciliation law broadened the orphan drug exclusion from Medicare negotiation. That change delayed these high-spending cancer drugs from selection in the early negotiation cycles, even though they rank among Medicare's highest-cost medications overall.
Is the Medicare drug price negotiation program facing legal challenges?
Drug manufacturers and PhRMA sued to block the program, arguing it violates the Fifth and First Amendments, but federal district courts and appeals courts, including the Fifth and Second Circuits, rejected those claims. The U.S. Supreme Court declined to hear the manufacturers' appeals in May 2026, leaving the program's legal footing intact for its 2027 and 2028 expansion.
What if my prescription isn't on the negotiated drug list?
Most Medicare-covered drugs are still priced through your plan's normal formulary and rebate process, not a negotiated Maximum Fair Price. If cost is a barrier, ask your pharmacist about manufacturer patient assistance programs, check GoodRx or a state pharmaceutical assistance program, and confirm your plan placed the drug on its lowest available cost-sharing tier during your next Annual Enrollment Period review.
