Medicare is gearing up to unveil new prescription drug prices for 2026, promising significant savings for Americans relying on government healthcare.
President Joe Biden recently approved agreements with drug manufacturers to reduce costs for 10 of Medicare’s most frequently prescribed and expensive medications, with details expected to be disclosed on Thursday afternoon.
The Biden administration predicts that these price cuts could save taxpayers around $6 billion, with seniors benefiting by saving approximately $1.5 billion on their medications.
“For years, millions of Americans had to choose between buying their medications or putting food on the table. Big Pharma kept Medicare from negotiating prices. But we took a stand—and won,” Biden stated.
“Today, we’re announcing historic agreements for lower prices on all 10 medications involved in this first round of negotiations.”
The drugs affected are commonly prescribed for serious conditions such as diabetes, cancer, and heart disease—conditions that impact millions of Americans each year.
With over 67 million people using Medicare, high drug prices have made healthcare unaffordable for many. “It’s a relief for millions of seniors who rely on these medications for conditions like heart failure, blood clots, and diabetes,” Biden added.
Among the medications set to see price reductions are blood thinners like Xarelto and Eliquis, as well as diabetes medications such as Jardiance and Januvia.
Historically, the U.S. government wasn’t allowed to negotiate with pharmaceutical companies over drug prices, although private insurers could. This gave drug companies the power to set high prices for essential treatments, impacting all Americans financially.
Pharmaceutical companies have voiced opposition to Biden’s negotiation efforts, which stemmed from the Inflation Reduction Act. While these first 10 drug prices won’t change until 2026, the government plans to negotiate prices on another 15 medications next year.
The Congressional Budget Office has projected that these price negotiations could save the government $25 billion over the next seven years.
Additionally, the Inflation Reduction Act places a cap on out-of-pocket drug costs, starting in 2025. Next year, seniors will face a maximum expense of $2,000 for prescriptions.
Though the anticipated lower drug costs could affect Medicare premium prices, the Centers for Medicare and Medicaid Services aims to stabilize premiums by increasing payments to insurers by $15 per member monthly.
“Some Republican lawmakers are disputing this premium stabilization program, claiming it needs congressional approval,” stated Norris. “However, this program is crucial for ensuring that Medicare Part D beneficiaries continue to have affordable choices in 2025.”
Open enrollment for Medicare runs from October 15 to December 7, with all selections taking effect in January.
“Even if you don’t need any of the covered drugs, this is still a positive development,” Norris remarked. “With an aging population, greater enrollment in Medicare is on the horizon. The government’s proactive approach to drug price negotiations is going to be appreciated by current and future beneficiaries.”