For the first time in Medicare's 60-year history, the federal government negotiated the price of prescription drugs directly with manufacturers, and the resulting discounts took effect January 1, 2026. The Medicare Drug Price Negotiation Program, created by the Inflation Reduction Act of 2022, cut list prices by 38% to 79% on 10 widely used drugs for blood clots, diabetes, heart failure, psoriasis, and blood cancer.
CoveredUSA breaks down exactly which 10 drugs qualify in 2026, the specific negotiated prices CMS agreed to, how the program reaches you through Original Medicare, Medicare Advantage, and Medigap differently, and which drugs are coming in the 2027 and 2028 negotiation rounds. For the broader Part D picture, see does Medicare cover prescription drugs. If you're comparing a recent bill against these negotiated prices, run it through the medical bill analyzer.
Coverage Breakdown
Direct Answer
Yes, Medicare's Drug Price Negotiation Program lowers costs, but only for a specific list of drugs. Starting January 1, 2026, negotiated Medicare prices cut list prices by 38% to 79% on the first 10 selected drugs under the Inflation Reduction Act. The discount only helps you if you take one of those 10 drugs and have a Medicare Part D plan. CMS is adding 15 more drugs for 2027 and 15 more, including Part B drugs, for 2028.
What the Medicare Drug Price Negotiation Program Is
The Inflation Reduction Act of 2022 (Public Law 117-169), signed by President Biden on August 16, 2022, gave the Centers for Medicare & Medicaid Services (CMS) the power to directly negotiate prices for a small number of high-cost, brand-name drugs covered under Medicare Part D. Before this law, Medicare was legally barred from negotiating drug prices at all, unlike the Department of Veterans Affairs or nearly every other developed country's national health system. CMS calls the negotiated price a Maximum Fair Price (MFP), the ceiling that a participating drug company must charge Part D plans and pharmacies for the selected drug.
CMS does not pick drugs at random. Each selected drug must meet all of the following criteria under the statute:
- Brand-name (single source) with no generic or biosimilar competitor on the market.
- Available for at least 7 years since FDA approval for small-molecule drugs, or 11 years for biologics.
- Among the highest total gross Medicare spending drugs, ranked using the prior year's Part D claims data, and Part B claims data starting with the 2028 selection cycle.
- Not exempted as an orphan drug treating a single rare disease, a low-spend plasma-derived product, or a biosimilar-eligible drug with enough market competition already.
The First 10 Negotiated Drugs and Their New 2026 Prices
CMS finalized negotiated Maximum Fair Prices for the first 10 selected drugs in August 2024, and every price below became the ceiling price for a 30-day supply starting January 1, 2026. Prices are rounded to the nearest cent as published by CMS.
How the Program Expands: 15 More Drugs for 2027, 15 More for 2028
CMS selected 15 additional Part D drugs in early 2025 for the second negotiation cycle, with new negotiated prices taking effect January 1, 2027. The list includes Novo Nordisk's Ozempic, Wegovy, and Rybelsus (semaglutide), priced at $274.00 for a 30-day supply, plus Trelegy Ellipta, Xtandi, Pomalyst, Ibrance, Ofev, Linzess, Calquence, Austedo, Breo Ellipta, Tradjenta, Xifaxan, Vraylar, Janumet, and Otezla. About 5.3 million people with Part D coverage used one of these drugs in 2024, accounting for $42.5 billion in total Part D drug costs and $1.7 billion in beneficiary out-of-pocket spending that year. CMS projects the 2027 prices will save people with Medicare about $685 million in out-of-pocket costs and save the Medicare program between $8.5 billion and $12 billion a year.
On January 27, 2026, CMS announced the third negotiation cycle: 15 newly selected drugs plus one renegotiated drug (Tradjenta), with prices effective January 1, 2028. This round includes Trulicity, Biktarvy, Orencia, Cosentyx, Erleada, Kisqali, Entyvio, Verzenio, Botox, Lenvima, Xolair, Rexulti, Xeljanz, Anoro Ellipta, and Cimzia. For the first time, four of these products, Botox, Cimzia, Orencia, and Entyvio, were selected primarily for their Medicare Part B spending rather than Part D spending, extending the Negotiation Program beyond retail prescriptions into physician-administered infusions and injections.
What Original Medicare, Medicare Advantage, and Medigap Mean for This Program
Original Medicare, meaning Medicare Part A hospital coverage and Part B outpatient and physician coverage, does not include prescription drug coverage on its own, so the Negotiation Program reaches you only through a separate Part D plan. Roughly 54 million people have Medicare Part D coverage, either through a standalone Part D plan paired with Original Medicare or through a Medicare Advantage plan that bundles drug coverage (MA-PD). Both plan types are legally required to honor the negotiated Maximum Fair Price for any of the 10 selected drugs on their formulary starting in 2026.
Medigap, sold to fill Original Medicare's Part A and Part B cost-sharing gaps, has never covered outpatient prescription drugs, so it plays no role in the Negotiation Program. ACA-compliant Marketplace plans, employer coverage outside Medicare, and Medicaid are not covered by this program either. Medicaid negotiates its own manufacturer rebates separately under a decades-old federal rebate program, and commercial ACA-compliant insurers set their own formulary prices through private pharmacy benefit managers.
How Negotiated Prices Interact With the 2026 Part D $2,100 Cap and $35 Insulin Cap
The Negotiation Program works alongside two other Inflation Reduction Act cost-saving provisions in 2026. The annual out-of-pocket cap on Part D drug spending is $2,100 in 2026, up from $2,000 in the cap's first year (2025), meaning your total drug costs stop once you hit that ceiling regardless of a drug's price. Insulin products also remain capped at $35 per month for people with Part D coverage, a rule that predates the Negotiation Program but stacks with it, since Fiasp and NovoLog already qualify for both the $35 insulin cap and the new $119.00 negotiated price.
The Medicare Prescription Payment Plan, also created by the Inflation Reduction Act, lets anyone with Part D coverage spread their out-of-pocket drug costs into monthly installments across the calendar year instead of paying a large amount at the pharmacy counter. Combined, the negotiated prices, the $2,100 out-of-pocket cap, and the payment-smoothing option are lowering the total 2026 cost of the 10 selected drugs more than any single provision could on its own.
How to Check If Your Drug Qualifies for the 2026 Negotiated Price
Confirming whether you benefit from the Negotiation Program takes only a few minutes. Start by comparing your current prescriptions against the 10 selected drugs (Eliquis, Xarelto, Jardiance, Farxiga, Januvia, Entresto, Enbrel, Imbruvica, Stelara, and Fiasp/NovoLog), then check with your specific Part D or MA-PD plan to confirm the negotiated price appears on your Explanation of Benefits for prescriptions filled on or after January 1, 2026.
Frequently Asked Questions
Does Original Medicare cover these negotiated drug prices?
Original Medicare (Part A and Part B) does not include prescription drug coverage at all, so it cannot apply the negotiated prices directly. You get access to the 2026 Maximum Fair Prices through a separate Medicare Part D plan, either a standalone prescription drug plan paired with Original Medicare or a Medicare Advantage plan that bundles drug coverage (MA-PD).
What did these drugs cost before the Negotiation Program?
Based on 2023 list prices, a 30-day supply of Stelara cost $13,836.00 before negotiation and now costs $4,695.00, a 66% discount. Eliquis dropped from $521.00 to $231.00 (56%), and Januvia fell the furthest, from $527.00 to $113.00, a 79% discount. All 10 negotiated prices took effect January 1, 2026.
Which drugs are being negotiated for 2027?
CMS selected 15 drugs in 2025 for the second negotiation cycle, with prices effective January 1, 2027, including Ozempic, Wegovy, and Rybelsus (semaglutide) at a $274.00 negotiated price, plus Trelegy Ellipta, Xtandi, Ibrance, Calquence, Janumet, and Otezla among others. About 5.3 million Part D enrollees used one of these drugs in 2024.
Which drugs are being negotiated for 2028?
On January 27, 2026, CMS announced 15 newly selected drugs plus one renegotiated drug for prices effective January 1, 2028, including Trulicity, Biktarvy, Cosentyx, Xolair, and Botox. This is the first negotiation cycle to include Medicare Part B drugs: Botox, Cimzia, Orencia, and Entyvio.
Do I need to apply to get the negotiated price?
No. If you are enrolled in a standalone Part D plan or a Medicare Advantage plan with drug coverage and you fill a prescription for one of the selected drugs, your plan and pharmacy must automatically charge no more than the 2026 negotiated Maximum Fair Price. There is no separate application.
Does this program apply to Medicaid or private insurance?
No. The Medicare Drug Price Negotiation Program only sets prices for Medicare Part D and, starting in 2028, some Part B drugs. Medicaid negotiates its own manufacturer rebates under a separate, decades-old federal rebate program, and ACA-compliant Marketplace plans and employer insurance set their own formulary prices through private pharmacy benefit managers.
How does CMS decide which drugs to negotiate?
CMS ranks brand-name drugs with no generic or biosimilar competitor by total gross Medicare spending, then selects the highest-spending drugs that have been on the market at least 7 years for small-molecule drugs or 11 years for biologics. Orphan drugs treating a single rare disease and certain low-spend biosimilar-eligible drugs are exempt from selection.
What if my Medicare Advantage plan doesn't include drug coverage?
Some Medicare Advantage plans, particularly certain PPOs, do not bundle Part D drug coverage. If yours doesn't, the Negotiation Program's pricing rules never apply through that plan, and Medigap never covers drugs either. You would need to enroll in a standalone Part D plan separately to access the 2026 negotiated prices.
