Last summer, President Biden signed the Inflation Reduction Act of 2022 (P.L. 117-169) into law. This law makes many improvements to Medicare by expanding benefits, lowering drug costs, and improving the sustainability of the Medicare program for generations to come. The law provides meaningful financial relief for millions of people with Medicare by improving access to affordable treatments and strengthening Medicare, both now and in the long run.
In addition, for the first time, the law provides Medicare the ability to directly negotiate the prices of certain high expenditure, single source drugs without generic or biosimilar competition. Below is the list of 10 drugs covered under Medicare Part D selected for negotiation for initial price applicability year 2026, based on total gross covered prescription drug costs under Medicare Part D and other criteria as required by the law. This information is from the Center for Medicare and Medicaid Services’ (CMS) recent fact sheet.
|Drug Name||Commonly Treated Conditions|
|Eliquis||Prevention and treatment of blood clots|
|Jardiance||Diabetes; Heart failure|
|Xarelto||Prevention and treatment of blood clots; Reduction of risk for patients with coronary or peripheral artery|
|Farxiga||Diabetes; Heart failure; Chronic kidney disease|
|Enbrel||Rheumatoid arthritis; Psoriasis; Psoriatic arthritis|
|Stelara||Psoriasis; Psoriatic arthritis; Crohn’s disease; Ulcerative colitis|
|Fiasp; Fiasp FlexTouch; Fiasp PenFill; |
NovoLog; NovoLog FlexPen; NovoLog PenFill
As mentioned in the fact sheet, the time period between June 1, 2022 and May 31, 2023, is the period used to determine which drugs were eligible for negotiation. During that time about 8,247,000 people with Medicare Part D coverage used these drugs to treat a variety of conditions, such as cardiovascular disease, diabetes, autoimmune diseases, and cancer. These selected drugs accounted for $50.5 billion in total Part D gross covered prescription drug costs, or about 20% of total Part D gross covered prescription drug costs during that time period. This huge expense for just four drugs demonstrates how necessary Medicare’s drug price negotiation powers are for the lowering of drug costs both for Medicare and beneficiaries.
We will continue to follow new developments on this topic, as the pharmaceutical industry has begun challenging this law, and it is unknown at this time how they will impact the implementation of drug pricing negotiations.
For more information and a Q&A on this program, see CMS’ fact sheet: Medicare Drug Price Negotiation Program: Selected Drugs for Initial Price Applicability Year 2026.
For more information on the prescription drug cost-saving changes happening as a result of the Inflation Reduction Act, see our article: How the inflation reduction act will continue to reduce drug costs in 2024.