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The first 10 drugs eligible for new Medicare price negotiations will go into effect on January 1, prompting significant out-of-pocket savings for some older Americans who rely on these drugs.
Enrollees in Medicare Part D prescription drug plans could see their negotiated out-of-pocket costs for drugs decrease by more than 50% on average in 2026, according to a new study from AARP, a nonprofit organization representing Americans age 50 and older.
Additionally, next year’s enrollees could pay less than $100 a month for seven of the 10 drugs being negotiated, the AARP study found.
The new Medicare Part D prescription drug price negotiation was enacted with the Inflation Control Act of 2022. According to AARP, approximately 9 million Medicare Part D enrollees will use the first 10 prescription drugs selected for price negotiations in 2026. This treatment is used for a variety of conditions, including autoimmune diseases, cancer, diabetes, and heart disease.
In 2027, 15 more drug names will receive price reductions under Medicare.
The Centers for Medicare and Medicaid Services estimates that Medicare drug price negotiations could reduce out-of-pocket costs for Medicare Part D enrollees by $1.5 billion in 2026.
Nancy Leamond, AARP’s chief advocacy and engagement officer, said in a Dec. 18 research briefing that the Inflation Control Act requires Medicare to identify high-cost drugs and negotiate lower prices on behalf of the beneficiaries and taxpayers who fund the program.
“We talk a lot about policy and data issues, but more than numbers, this is about the people in our lives – our parents, grandparents, friends and neighbors – who will finally be free from high drug costs and the fear that the prices of the drugs they need will spiral out of control,” Leamond said.
The Inflation Control Act also increases the annual out-of-pocket maximum for Medicare Part D to $2,100 per beneficiary in 2026, from the $2,000 first established under the law in 2025. Once you reach the maximum out-of-pocket cost for a covered drug, you’ll be paid 100% for the rest of the year. Other changes in the law include a $35 monthly cap on insulin for Medicare beneficiaries, rebates to beneficiaries if drug prices rise faster than inflation, and free vaccines to prevent certain conditions such as shingles.
Separately, the Trump administration is working to lower prescription drug prices for Americans through negotiations with nine major pharmaceutical companies. But the “Big and Beautiful” tax plan signed into law in July would delay or completely exclude certain drugs from becoming eligible for Medicare drug negotiations.
How costs will fall for Medicare beneficiaries in 2026
AARP’s analysis of 56 single plan changes from 2025 to 2026 found that, overall, Medicare enrollees will see an average 51% reduction in negotiated drug costs.
The AARP study found that in five states with high Medicare enrollment rates, enrollees will see an average reduction in their cost-sharing of about 50% for the 10 drugs being negotiated.
Of the states surveyed, Florida is expected to see the largest average reduction of 54%. Pennsylvania follows with 53%. California and New York each have 50%. and Texas, 48%.
Average monthly enrollee costs for 10 drugs are projected to decline from 2025 to 2026, according to AARP’s analysis of specific single plans.
Research shows that the drug that could offer the greatest cost savings is Stelara, which is used to treat autoimmune diseases. Based on an analysis of data from the Medicare Plan Finder website by AARP, an enrollee’s average monthly cost for that treatment could drop by $5,046 (or 68%) in 2026.
Cancer drug Imbruvica and autoimmune disease drug Enbrel were in the top three with the most significant price drops, potentially saving patients more than $1,000 per month.
Although these three drugs still require high copays, Medicare beneficiaries will benefit from a $2,100 copay cap in 2026, AARP notes in the study.
Here’s how much enrollees can pay and save, according to AARP’s analysis of available data.
Stellara
Treatment: Autoimmune Disease Average monthly cost in 2025: $7,425 Average monthly cost in 2026: $2,379 Potential savings: 68%
Imbruvica
Treatment: Cancer Average monthly cost in 2025: $4,983 Average monthly cost in 2026: $2,813 Potential savings: 44%
Enbrel
Treatment: Autoimmune Disease Average monthly cost in 2025: $2,265 Average monthly cost in 2026: $619 Potential savings: 73%
Fasiga
Treatment: Diabetes and Heart Disease Average monthly cost in 2025: $141 Average monthly cost in 2026: $39 Potential savings: 73%
Jardiance
Treatment: Diabetes Average monthly cost in 2025: $103 Average monthly cost in 2026: $43 Potential savings: 58%
Eliquis
Treatment: Blood clots Average monthly cost in 2025: $110 Average monthly cost in 2026: $51 Potential savings: 53%
Charelto
Treatment: Blood clots Average monthly cost in 2025: $103 Average monthly cost in 2026: $45 Potential savings: 56%
entrested
Treatment: Chronic Heart Failure Average monthly cost in 2025: $118 Average monthly cost in 2026: $64 Potential savings: 46%
Janubia
novolog
Indeed, Medicare drug price reductions are based on AARP’s analysis of available data. AARP says additional research is needed to fully evaluate the effectiveness of Medicare drug price negotiations. The findings are averages, so variances may vary by individual plan, the organization said in the study.
AARP said it is still important to re-evaluate plan coverage annually because drug price changes can vary between plans available to individuals.
Enrollees in private Medicare Advantage insurance plans can shop around for new coverage during an open enrollment period from January 1 to March 31. All Medicare beneficiaries can choose to switch their coverage during annual open enrollment from October 15 to December 7. Other initial and special enrollment periods may apply depending on individual circumstances.
