A Medicare enrollee filling a monthly prescription for Eliquis, one of the most commonly prescribed blood thinners in the country, has been paying a price based on what the drugmaker charged. Starting in 2026, that changes. The federal government has, for the first time in Medicare’s history, directly negotiated prices on 10 of the program’s costliest prescription drugs, and the discounts are steep: more than 50 percent off for several of the medications, with one insulin product dropping 76 percent.
The 10 drugs include treatments for blood clots, heart failure, diabetes, cancer, and autoimmune diseases. Together, they are taken by roughly 9 million Medicare beneficiaries and accounted for about $50.5 billion in Part D spending during the period the Centers for Medicare and Medicaid Services used to select them. Separately, a $35 monthly cap on insulin costs has already been in effect since 2023, shielding millions of seniors from bills that once exceeded $400 a month.
The negotiated prices CMS published are projected to save Medicare approximately $6 billion in the first year and reduce out-of-pocket costs for patients by $1.5 billion. Independent analyses from the Kaiser Family Foundation and the HHS Office of the Assistant Secretary for Planning and Evaluation have produced broadly consistent estimates.
The 10 drugs, their new prices, and what they treat
CMS selected these medications because they ranked among the highest-spending drugs in Medicare Part D. Here is what the negotiations produced:
- Eliquis (apixaban) prevents strokes and blood clots. About 3.7 million Medicare enrollees take it. The negotiated price: $231 for a 30-day supply, roughly 56 percent below what Medicare had been paying.
- Jardiance (empagliflozin) treats Type 2 diabetes and heart failure. New price: about $197 per month, a 66 percent reduction.
- Xarelto (rivaroxaban), another blood thinner, drops to approximately $197 for a 30-day supply, a 56 percent cut.
- Januvia (sitagliptin) treats Type 2 diabetes. New price: roughly $113 per month, a 63 percent discount.
- Farxiga (dapagliflozin) is prescribed for diabetes, heart failure, and chronic kidney disease. New price: about $178 monthly, a 68 percent reduction.
- Entresto (sacubitril/valsartan) treats heart failure. New price: approximately $295 per month, a 53 percent discount.
- Enbrel (etanercept), an injectable for rheumatoid arthritis and other autoimmune conditions, drops to about $2,355 per month, a 67 percent cut.
- Imbruvica (ibrutinib) treats blood cancers including chronic lymphocytic leukemia. New price: roughly $9,319 per month, a 38 percent discount.
- Stelara (ustekinumab) is used for psoriasis and Crohn’s disease. New price: about $4,695 per month, a 66 percent reduction.
- Fiasp and NovoLog (insulin aspart products) drop to approximately $119 per month, a 76 percent discount. Because of the separate $35 insulin cap, most Part D enrollees will pay even less out of pocket.
The $35 insulin cap is already saving millions
The insulin protections predate the negotiation program and are already in effect. Under the Inflation Reduction Act, Medicare Part D enrollees have paid no more than $35 for a one-month supply of covered insulin since January 1, 2023, with no deductible. CMS extended that protection to certain Part B insulin (typically delivered via pump) starting July 1, 2023. Beneficiaries filling a 90-day prescription pay no more than $105, again with no deductible.
Before the cap took effect, some Medicare enrollees on insulin faced monthly out-of-pocket costs exceeding $400, depending on their plan’s formulary and cost-sharing structure. For the estimated 3.4 million Medicare beneficiaries who use insulin, the cap eliminated the kind of sticker shock that had led some seniors to skip doses or ration their supply.
The $2,000 out-of-pocket cap adds another layer of protection
The negotiated prices are landing alongside another major change. Also taking effect in 2026 under the Inflation Reduction Act: a hard $2,000 annual cap on total out-of-pocket Part D spending. Before this, there was no ceiling. Beneficiaries in the catastrophic coverage phase still owed 5 percent of drug costs, which for patients on expensive specialty medications could mean thousands of dollars a year with no upper limit.
The two provisions reinforce each other. A Medicare enrollee taking Enbrel, for instance, would have annual out-of-pocket drug spending capped at $2,000 regardless of the drug’s list price. And because the negotiated price is lower, that enrollee may reach the cap more slowly, or not at all, leaving more room in their budget for other medications.
Beneficiaries also now have the option to spread their out-of-pocket costs across the year through the Medicare Prescription Payment Plan, which allows monthly installments rather than large lump-sum payments at the pharmacy counter.
What the GAO found about the rollout
The Government Accountability Office reviewed the negotiation program’s implementation in report GAO-25-106996 and found that CMS met every statutory deadline: inviting manufacturers to participate, executing agreements, and publishing the Maximum Fair Prices. The agency documented its methodology as required by law.
But the GAO’s review was procedural, not operational. It did not audit whether manufacturers are fully complying with the new prices, whether savings are being passed through to Part D plans and then to patients, or whether billing errors are occurring at the pharmacy level. Those questions will require follow-up audits once claims data from 2026 accumulates.
CMS Administrator Chiquita Brooks-LaSure said in a press release that “Medicare drug price negotiation works” and that the results show the government can negotiate lower prices without restricting access to medications. The pharmaceutical industry disagrees. The Pharmaceutical Research and Manufacturers of America (PhRMA) has argued the program amounts to government price-setting rather than genuine negotiation and warns it could reduce investment in new drug development over time. Several major drugmakers, including Bristol Myers Squibb, Johnson & Johnson, and Merck, filed lawsuits challenging the program’s constitutionality, though federal courts have so far rejected those challenges.
What could limit the savings in practice
The projected savings are significant, but several real-world factors could affect what patients actually experience.
Plan design still matters. The negotiated prices cap what Medicare pays for these 10 drugs, but Part D plan sponsors still control formulary placement, prior authorization requirements, and tier assignments. A plan could place a negotiated drug on a higher cost-sharing tier or require step therapy before covering it. CMS has not yet published a comprehensive analysis of 2026 formularies showing how plans are handling the negotiated products.
Pricing pressure may shift elsewhere. The law requires drugmakers to honor the negotiated prices for Medicare-covered uses but does not dictate what they charge in the commercial insurance market. Some policy analysts have raised the possibility that companies could offset Medicare discounts by raising list prices for employer-sponsored or individual-market plans. As of June 2026, no published empirical evidence shows a systematic pattern of such cost-shifting tied to the first negotiation round, but it remains a concern worth watching.
More prescriptions could mean higher total spending. If lower prices lead more beneficiaries to fill prescriptions they had previously skipped due to cost, total Medicare spending on these drugs could rise even as per-unit prices fall. That would be a positive health outcome, but it could narrow the net budget savings CMS has projected.
Enforcement is untested. Whether pharmacies are reimbursed accurately, whether beneficiaries are charged the correct cost-sharing amounts, and whether disputes between CMS and manufacturers delay implementation are all open questions. The GAO’s procedural review did not cover these areas, and real-world claims data will be needed to answer them.
The second round targets Ozempic, Wegovy, and 13 other drugs
CMS is not stopping at 10 drugs. In early 2025, the agency announced 15 additional medications selected for the second round of negotiations, with new prices set to take effect in 2027. That list includes Ozempic and Wegovy (semaglutide), two of the most talked-about and expensive drugs in the country, along with other high-cost treatments for cancer, autoimmune diseases, and blood disorders.
The Inflation Reduction Act requires the scope to grow: up to 15 drugs for 2027, another 15 for 2028, and 20 per year after that.
For the roughly 9 million Medicare beneficiaries affected by the first round, the practical impact begins when they fill prescriptions starting in January 2026. The negotiated prices, the $35 insulin cap, and the $2,000 annual out-of-pocket limit together represent the most significant changes to Medicare drug coverage since Part D was created in 2003. CMS has described these provisions as central to its broader implementation of the Inflation Reduction Act.
Whether the savings projections hold, and whether patients actually see lower costs without new access barriers, will become clearer as claims data from the first year is collected. The next major milestone: finalized prices for the second round, when the program’s ambitions get considerably bigger.
