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The first 10 drugs subject to new Medicare price negotiations will go into effect on Jan. 1, prompting substantial out-of-pocket savings for certain older Americans who rely on those medications.
Enrollees in Medicare Part D prescription drug plans may see their out-of-pocket costs for the negotiated drugs fall by an average of more than 50% in 2026, according to new research from the AARP, a nonprofit representing Americans ages 50 and over.
Moreover, enrollees may pay less than $100 per month for seven of the 10 negotiated drugs next year, AARP’s research found.
The new Medicare Part D prescription drug price negotiations were enacted with the Inflation Reduction Act in 2022. About 9 million Medicare Part D enrollees use the first 10 prescription drugs selected for price negotiations in 2026, according to AARP. The treatments are used for a variety of conditions, including autoimmune diseases, cancer, diabetes and heart disease.
Another 15 drug names are set to see price cuts under Medicare in 2027.
In 2026, the Medicare drug price negotiations may save Medicare Part D enrollees $1.5 billion in out-of-pocket expenses, the Centers for Medicare and Medicaid Services has estimated.
The Inflation Reduction Act requires Medicare to identify high-cost drugs and negotiate lower prices on behalf of beneficiaries and taxpayers who help fund the program, Nancy LeaMond, chief advocacy and engagement officer at AARP, said during a Dec. 18 briefing on the research.
“We often talk about issues in terms of policy and data, but beyond the numbers, this is about the people in our lives, parents, grandparents, friends and neighbors, who will finally see relief from the high drug costs and the fear that the price of needed medications will spiral out of control,” LeaMond said.
The Inflation Reduction Act also raises the annual Medicare Part D out-of-pocket spending cap to $2,100 per beneficiary in 2026, up from $2,000, the first amount established under the law in 2025. Once out-of-pocket spending on covered medications reaches that limit, the plan pays 100% for the rest of the year. Other changes from the law include a $35 per month cap on insulin for Medicare beneficiaries, rebates to beneficiaries if drug prices rise faster than inflation and free vaccines to prevent certain conditions like shingles.
The Trump administration is separately working to lower prescription drug prices for Americans through negotiations with nine large pharmaceutical companies. However, the “big beautiful” tax package signed into law in July made it so that certain drugs will have either delayed eligibility for Medicare drug negotiations or be excluded entirely.
How Medicare beneficiaries’ costs may drop in 2026
Overall, Medicare enrollees will see their costs for the negotiated drugs drop by an average of 51%, AARP found based on an analysis of changes in 56 standalone plans between 2025 and 2026.
In five states that have high Medicare enrollment, enrollee cost sharing will decrease by an average of about 50% for the 10 negotiated drugs, AARP found.
Of the states included in the research, Floridians are poised to see the biggest average reduction of 54%. That is followed by Pennsylvania, with 53%; California and New York, each with 50%; and Texas, 48%.
Average monthly enrollee costs for the 10 drugs are projected to fall from 2025 to 2026, according to AARP’s analysis of certain standalone plans.
Based on the research, the drug that may offer the biggest dollar cost reduction is Stelara, used to treat autoimmune conditions. Average monthly enrollee costs for that treatment may drop by $5,046 — or 68% — in 2026 based on AARP’s analysis of data on the Medicare Plan Finder website.
Cancer therapy Imbruvica and Enbrel, a treatment for autoimmune diseases, round out the top three for most significant price drops, potentially saving patients more than $1,000 per month.
While those three drugs will still require high out-of-pocket costs, Medicare beneficiaries will benefit from the $2,100 out-of-pocket cap in 2026, AARP noted in its research.
Here’s how much enrollees stand to pay — and save — according to AARP’s analysis of available data:
Stelara
Treatment for: autoimmune conditions2025 average monthly cost: $7,4252026 average monthly cost: $2,379 Potential savings: 68%
Imbruvica
Treatment for: cancer2025 average monthly cost: $4,9832026 average monthly cost: $2,813Potential savings: 44%
Enbrel
Treatment for: autoimmune conditions2025 average monthly cost: $2,2652026 average monthly cost: $619Potential savings: 73%
Farxiga
Treatment for: diabetes and heart disease2025 average monthly cost: $1412026 average monthly cost: $39Potential savings: 73%
Jardiance
Treatment for: diabetes2025 average monthly cost: $1032026 average monthly cost: $43Potential savings: 58%
Eliquis
Treatment for: blood clots2025 average monthly cost: $1102026 average monthly cost: $51Potential savings: 53%
Xarelto
Treatment for: blood clots2025 average monthly cost: $1032026 average monthly cost: $45Potential savings: 56%
Entresto
Treatment for: chronic heart failure2025 average monthly cost: $1182026 average monthly cost: $64Potential savings: 46%
Januvia
NovoLog
To be sure, the Medicare drug price reductions are based on AARP’s analysis of available data. Additional research is needed to evaluate the full effects of the Medicare drug price negotiations, according to AARP. Because the findings are averages, the differences may vary among individual plans, the organization states in its research.
Because individuals may see variations in drug price changes across available plans, AARP said it is still important to reevaluate plan coverage every year.
Enrollees in private Medicare Advantage insurance plans may shop around for new coverage during an open enrollment period from Jan. 1 through March 31. All Medicare beneficiaries can opt to switch coverage during annual open enrollment from Oct. 15 through Dec. 7. Other initial and special enrollment periods may apply, based on individual circumstances.
