CMS will begin their Medicare drug price negotiations 2026 with 10 popular high cost prescription medications. CMS has announced the first 10 drugs that will be subject to price negotiations. The negotiations are part of the Inflation Reduction Act. Until recently, Medicare was able to negotiate prices for the medical care beneficiaries receive; this did not include the costs of medications.
If the current plan does not change; on January 1, 2026, the negotiated drug prices for the first 10 drugs will go into effect.
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Medicare is set to negotiate the cost for some of the more expensive prescription medications with the drug manufacturers.
It is important to note; the negotiations do not apply to drugs that offer a generic equivalent.
The first 10 medications CMS will negotiate are:
- Eliquis (a blood thinner)
- Enbrel (for rheumatoid arthritis)
- Entresto (for heart failure)
- Farxiga (for diabetes, heart failure & chronic kidney disease)
- Fiasp & Novalog (for diabetes)
- Imbruvica (for blood cancers)
- Januvia (for diabetes)
- Jardiance (for diabetes)
- Stelara (for psoriasis & Chron’s disease)
- Xarelto (a blood thinner)
The 10 drugs listed above were chosen because they made up almost 20% of the Medicare Part D spending from June 2022 through the end of May 2023. Medicare Part D covers prescriptions beneficiaries take at home. Part D does not cover medications medical providers administer in medical facilities. When this is the case, Medicare Part B covers the drugs.
Take a look at the drug price negotiation fact sheet
Just the start
The first 10 drugs are just the start of the proposed price negotiations. In 2027, the plan is to add 15 more and the hope is to add more in the years to follow. This plan could change if the drug manufacturers can successfully stop the price negotiations.
Learn about the Medicare prescription payment program.
Drug manufacturers
As it stands, if the drug companies do not agree to the negotiations, they face possible tax penalties. Although drug manufacturers can avoid the tax penalty if they remove their drug from the Medicare market. Unfortunately, if they do that, they take away lifesaving drugs from Medicare beneficiaries and lose a large part of their market share.
Some large drug companies have hired legal counsel to stop the price negotiations. They argue the loss in income will affect their ability to fund important research and development and that in turn, hinders their ability to produce new medicines.
The Negotiation Process
- Drug Selection: Medicare will identify eligible drugs based on spending and clinical impact.
- Price Negotiations: CMS will negotiate directly with manufacturers to establish a “maximum fair price.”
- Implementation: The agreed-upon prices for drugs covered under Medicare Part D will take effect in 2026 with additional drugs phased in over the following years.
Potential benefits
Lower out-of-pocket costs: Beneficiaries could noticeable reductions in their high cost medication expenses.
Federal savings: By reducing the prices for some of the most expensive drugs, the policy could generate substantial savings for Medicare, potentially freeing up funds for other healthcare initiatives.
Health care equity: Lower drug costs may improve access to essential medications for underserved populations.
Concerns
While the policy is praised by some, it is not without controversy.
Impact on innovation: Pharmaceutical companies warn that reduced revenues could lead to decreased availability of funds for research and development. This could potentially slow the pace of medical innovation.
Legal and logistical hurdles: Industry groups have initiated legal challenges, questioning the constitutionality of the negotiation framework. Additionally, the administrative complexities of implementing the program are significant.
Click here to find out about the $2,000 drug cap for 2025
Looking Ahead
As the potential implementation approaches, many groups are watching closely to see what the impact of this policy will be. While challenges remain, the policy’s success could pave the way for broader reforms that could have an effect on the entire healthcare system.
Monitoring both long term and short term effects of this program are essential to determine if Medicare’s negotiating power achieves its intended goals or brings unintended consequences.
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