Xavier Becerra United States Secretary of Health and Human Services | Official Website
The Biden-Harris Administration has announced agreements for new, lower prices for 10 selected drugs, marking a significant step in reducing prescription drug costs for millions of Americans. These drugs, which are among the most expensive and frequently dispensed in the Medicare program, treat conditions such as heart disease, diabetes, and cancer. The new prices will take effect on January 1, 2026, for those with Medicare Part D prescription drug coverage.
Had these prices been implemented last year, Medicare would have saved an estimated $6 billion—approximately 22 percent across the selected drugs. The negotiated discounts range from 38 to 79 percent off list prices. Approximately nine million people with Medicare use at least one of these drugs and are expected to see aggregated savings of $1.5 billion in their out-of-pocket costs in 2026.
“Americans pay too much for their prescription drugs. That makes today’s announcement historic. For the first time ever, Medicare negotiated directly with drug companies and the American people are better off for it,” said U.S. Department of Health and Human Services (HHS) Secretary Xavier Becerra.
Becerra highlighted that Congressional budget estimators predicted about $100 billion savings over ten years from drug negotiations and a $3.7 billion saving in the first year alone. “Today we’re announcing that in our first year of negotiations we are saving Medicare an estimated $6 billion and Americans who pay out of pocket will be saving another $1.5 billion moving forward,” he added.
CMS Administrator Chiquita Brooks-LaSure echoed this sentiment: “CMS is proud to have negotiated drug prices for people with Medicare for the first time... We made a promise to the American people, and today, we are thrilled to share that we have fulfilled that promise.”
An example provided illustrates how a senior taking Stelara might see their coinsurance drop from around $3,400 today to approximately $1,100 when the negotiated price goes into effect before reaching the catastrophic cap.
In August 2023, HHS had announced these initial ten drugs covered under Medicare Part D selected for negotiation based on their substantial contribution to total Medicare spending—$56.2 billion or about 20 percent of total Part D gross spending in 2023.
“CMS negotiated in good faith on behalf of millions... The new negotiated prices will bring much-needed financial relief,” said Meena Seshamani, MD, PhD., CMS Deputy Administrator and Director of the Center for Medicare.
The Office of the Assistant Secretary for Planning and Evaluation (ASPE) released data detailing pricing trends showing list price increases up to 55 percent from 2018 to 2023 among these selected drugs.
Looking ahead, CMS plans to select up to 15 more drugs covered under Part D by February 1, 2025; up to another set by February each subsequent year as required by the Inflation Reduction Act.
Alongside these newly negotiated prices, other measures from this act already benefit people with Medicare through reduced drug costs including a forthcoming cap at $2,000 on out-of-pocket expenses starting next year.
Further details can be found via:
- [CMS Negotiated Prices Fact Sheet](https://www.cms.gov/files/document/fact-sheet-negotiated-prices-initial-price-applicability-year-2026.pdf)
- [Historic Trends Fact Sheet](https://aspe.hhs.gov/reports/medicare-drug-price-negotiation-program-comparing-drug-price)
- [Plain Language Infographic](https://www.cms.gov/files/document/infographic-negotiated-prices-maximum-fair-prices.pdf)
For additional information about the Inflation Reduction Act visit LowerDrugCosts.gov or MedicamentosBajoPrecio.gov for Spanish resources.
