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
| Medicare Plan Type | Subject to 2026 Negotiated Prices? | What Applies | Notes |
|---|---|---|---|
| Original Medicare, standalone Part D plan (PDP) | Yes | The negotiated Maximum Fair Price on all 10 drugs when filled at the pharmacy | Applies automatically in 2026; no extra enrollment step required |
| Medicare Advantage prescription drug plan (MA-PD) | Yes | Same negotiated price as standalone Part D plans | MA-PD plans must pass through the negotiated 2026 price; the plan you pick does not change access |
| Medicare Part B (physician-administered drugs) | Not yet in 2026 | No negotiated price for 2026; Part B drugs join the program with prices effective 2028 | Third negotiation cycle, announced January 2026, is the first to include Part B |
| Commercial insurance, Medicaid, or uninsured | No | Medicare's negotiated price does not carry over | Federal law bars using the Maximum Fair Price as a Medicaid best-price benchmark; commercial rebates are set separately |
Negotiated Maximum Fair Prices reduce what Medicare Part D plans pay for a drug, which lowers coinsurance for beneficiaries during the deductible and initial coverage phases. The 2026 Part D annual out-of-pocket cap of $2,100 still applies on top of these savings, regardless of whether a specific drug is on the negotiated list.
Source: CMS Medicare Drug Price Negotiation Program 2026 Fact Sheet, KFF Key Facts About Medicare Drug Price Negotiation
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.