Unlocking Affordable Medications for Older Americans: Five Facts about the Medicare Drug Price Negotiation Program
The Medicare Part D program is a lifeline for older Americans, ensuring access to life-saving medications. With 88% of Medicare enrollees aged 65 and older, the importance of this program cannot be overstated. As our understanding of disease processes grows, so does the number of drug therapies available to treat illnesses. A research letter published in 2024 states that those 65 years old and older take a mean of 4.3 prescription medications.1 Covering the out-of-pocket costs for prescription medications has become challenging for some Medicare beneficiaries.
Medicare Part D began when the Medicare Modernization Act (MMA) of 2003 amended the Social Security Act (SSA), creating Medicare prescription drug coverage. The SSA did not allow Medicare to negotiate prescription drug prices directly with drug manufacturers until the Inflation Reduction Act (IRA) of 2022 passed, which started the process of lowering prescription costs for Medicare members who take specific brand-name, single-source medications and improving access to some of the costliest medications.
At Rainmakers Strategic Solutions, our highly skilled pharmacists consistently review and anticipate changes within Medicare Part D. Our pharmacists have been involved with the Part D program since its inception. With the first 10 selected negotiated drugs going into effect in 2026, the Rainmakers pharmacists will be supporting the implementation by ensuring that these drugs will be accessible to our older Americans. Our vast policy knowledge and work providing audit and consulting services support this vital law passed to lower prescription drug costs, promote medication access for Medicare members, and save the Medicare program money.
Here are five key facts to know about the Medicare Drug Price Negotiation Program:
- Lower Prices in 2026: Medicare members can expect lower prices starting January 1, 2026, for 10 selected drugs including Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and Novolog/Fiasp.
- Selection Criteria: Drugs included in this program were selected based on Medicare spending and the number of Medicare members who take the medications. Approximately 20% of gross Medicare Part D spending in 2023 covered the first 10 brand-name drugs selected. These 10 drugs are used by approximately 8.8 million Medicare members, who spent an estimated $3.9 billion out-of-pocket.2 The goal when selecting drugs for negotiation is to choose medications that account for the highest Total Expenditures under Medicare Part D and to choose medications used by significant numbers of Medicare members. For example, to ensure significant numbers of Medicare members derive benefits, certain drugs and biologics are excluded from price negotiations (i.e., orphan drugs approved for one rare disease).3
- Cost Savings: Medicare members will see the cost savings when they pick up and pay for their medications. The Medicare Transaction Facilitator (MTF) system, developed specifically to process prescription drugs selected for the Negotiation Program, facilitates data transmission between pharmacies and manufacturers to ensure Medicare members receive the negotiated prices.
- Comprehensive Coverage: The Negotiation Program covers all strengths and formulations. For example, Imbruvica is available in tablets, capsules, and liquid suspension, which are included in the Negotiation Program. Additionally, the legislation contains drug formulary requirements that ensure Medicare members have equal access to the selected drugs.
- Annual Updates: Each year, a new list of selected drugs will be published, and the current selected drugs will be evaluated for continuation on the list. For 2027, there are 15 selected drugs: Ozempic/Rybelsus/Wegovy, Trelegy Ellipta, Xtandi, Pomalyst, Ibrance, Ofev, Linzess, Calquence, Austedo/Austedo XR, Breo Ellipta, Tradjenta, Xifaxan, Vraylar, Janumet/Janumet XR, Otezla.
The Medicare Drug Price Negotiation Program seeks to make commonly prescribed medications more affordable for Medicare members. Changes to the program continue through Executive Orders and the first group of drugs is effective January 1, 2026. Careful attention to changes and outcomes in the program is imperative. As a significant percentage of older adults rely on medications, the Rainmakers pharmacists continue to monitor the prescription drug program landscape to determine how best to support this fluid process in lowering drug costs.
- Innes GK, Ogden CL, Crentsil V, Concato J, Fakhouri TH. Prescription Medication Use Among Older Adults in the US. JAMA Intern Med. 2024;184(9):1121–1123. doi:10.1001/jamainternmed.2024.2781. Accessed April 22, 2025.
- Centers for Medicare and Medicaid Services. Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026. https://www.cms.gov/newsroom/fact-sheets/medicare-drug-price-negotiation-program-negotiated-prices-initial-price-applicability-year-2026. Published August 15, 2024. Accessed April 22, 2025.
- Centers for Medicare and Medicaid Services. Medicare Drug Price Negotiation Program: Final Guidance, Implementation of Sections 1191 – 1198 of the Social Security Act for Initial Price Applicability Year 2027 and Manufacturer Effectuation of the Maximum Fair Price in 2026 and 2027. https://www.cms.gov/files/document/medicare-drug-price-negotiation-final-guidance-ipay-2027-and-manufacturer-effectuation-mfp-2026-2027.pdf. Published October 2, 2024. Accessed April 22, 2025.
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