Prescription drug expenses for millions of Medicare enrollees are projected to decline sharply in 2026, as the first set of federally negotiated prices takes effect under Medicare’s new drug pricing authority.
The study examined plan data in five states with the largest Medicare populations, California, Florida, New York, Pennsylvania, and Texas, and found similar levels of savings across all markets reviewed.
The negotiated prices apply to 10 high-cost prescription drugs selected for the inaugural round of Medicare price negotiations. Those medications are Eliquis, Xarelto, Januvia, Jardiance, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and NovoLog. Together, they are used by nearly 9 million Medicare Part D enrollees to treat conditions such as heart disease, diabetes, autoimmune disorders, cancer, and chronic kidney disease.
According to the analysis, enrollee cost-sharing, including copayments and coinsurance tied to a drug’s list price, will fall by roughly half between 2025 and 2026 across all 56 stand-alone Part D plans included in the study. Seven of the 10 medications are expected to have average monthly out-of-pocket costs below $100 in 2026, compared with only two drugs at that level the year before.
While most beneficiaries will see meaningful relief, the study noted that three drugs, Enbrel, Imbruvica, and Stelara, will remain comparatively expensive on a monthly basis, with some plans requiring several hundred to more than $2,000 in out-of-pocket costs. However, those expenses will be subject to a new Medicare Part D annual spending cap, which limits prescription drug costs to $2,100 per year beginning in 2026.
The report also found that access to the negotiated medications will broaden. Four of the 10 drugs were not covered by all stand-alone Part D plans in 2025, but all plans analyzed are required to cover every negotiated drug in 2026. Utilization management tools, such as prior authorization and quantity limits, are expected to remain largely unchanged.
The Centers for Medicare & Medicaid Services estimates that the first round of negotiated prices could collectively save Medicare enrollees $1.5 billion in out-of-pocket costs in 2026. Additional drugs are slated for future negotiation rounds, with Medicare Part B medications, those administered by health care providers, scheduled to be added starting next year.
“Starting next year, American drug prices will come down fast and furious and will soon be the lowest in the developed world,” Trump said during his announcement at the White House, joined by industry executives.
AARP cautioned that individual savings will vary by plan, emphasizing the importance for Medicare beneficiaries to review their coverage options annually as pricing and formularies change.
Around 56 million people are enrolled in Medicare Part D prescription plans, according to the Centers for Medicare & Medicaid Services.