What You Need to Know About the Medicare Drug Price Negotiation Program

The Biden-Harris Administration’s Inflation Reduction Act—also known as the new prescription drug law—expands Medicare benefits, lowers prescription drug costs, and, for the first time ever, allows Medicare to directly negotiate with drug companies to lower the prices for certain high-cost prescription drugs.

The Centers for Medicare & Medicaid Services (CMS) selected ten drugs paid for under Medicare Part D prescription coverage for the first cycle of negotiations and has reached agreement for all 10 drugs on new, negotiated lower prices drugs that will go into effect in 2026. These are some of Medicare’s most costly and most used medications. They treat a variety of conditions, such as heart disease, diabetes, arthritis, and cancer.

The Medicare Drug Price Negotiation Program will improve access to life-saving drugs for people with Medicare and is expected to save Medicare billions of dollars, strengthening Medicare now and for generations to come.

Meaningful impacts of the new, negotiated lower prices include:

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Future Negotiations

More drugs will be selected each year as part of the Medicare Drug Price Negotiation Program. By February 1, 2025, CMS will announce up to 15 additional drugs covered under Part D that will be selected for negotiation.
Other Ways the New Prescription Drug Law is Lowering Costs for People with Medicare:

• Insulin costs capped at $35 for a month’s supply of each covered insulin product
• Certain recommended vaccines free for people with Medicare Part D coverage
• More help paying for high drug costs through the expansion of the Extra Help program. For more information and to see if you are eligible, visit Medicare.gov/extrahelp.
• And for 2025, everyone with Medicare prescription drug coverage will have their annual out-of-pocket costs capped at $2,000.

Notes: Drugs selected for negotiation must have no generic or biosimilar competition. Participation by drug companies in the drug price negotiation program is voluntary; the figures included here are estimates based on continued drug company participation in Medicare.

You can find out more about how the Inflation Reduction Act is lowering prescription drug costs for people with Medicare by visiting: https://www.cms.gov/inflation-reduction-act-and-medicare.

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The content herein is provided for general information purposes only, and does not constitute legal, tax, or other advice or opinions on any matters. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy.