What’s happening:
Some Medicare enrollees may pay about 50% less out of pocket for certain prescription drugs starting in 2026, according to a report from Reuters.
Why it matters:
This is the first real-world impact of Medicare negotiating drug prices under the Inflation Reduction Act of 2022 — a change seniors have been promised for years.
Smart Senior Daily Staff
What the report found
Reuters reports that an AARP analysis of Medicare Part D plans in five large states — California, Florida, Texas, New York, and Pennsylvania — shows major savings for 10 widely used drugs once negotiated prices take effect in January.
- Out-of-pocket costs for those drugs are projected to drop nearly 50% in 2026 compared with 2025
- Seven of the 10 drugs are expected to cost under $100 per month by 2026
- Only two drugs were that affordable in 2025
The negotiated drugs include:
- Eliquis, a blood thinner from Pfizer and Bristol Myers Squibb
- Januvia, a diabetes drug from Merck
- Jardiance and several insulin products
Savings largely come from lower coinsurance, since patients pay a percentage of a now-lower negotiated price. Some co-pays have also fallen, especially for insulin.
Smart Senior Daily Staff
The catch
Not all drugs become affordable overnight.
Reuters notes that patients taking the most expensive medications — including Enbrel, Imbruvica, and Stelara — could still face monthly out-of-pocket costs ranging from about $600 to $2,800, depending on their plan.
AARP also cautioned that savings vary widely between plans, and results from these five states may not fully reflect what all Medicare enrollees will see.
One more important change
The Inflation Reduction Act also adds a hard cap on Medicare prescription drug spending:
- $2,100 per year starting in 2026
The Centers for Medicare & Medicaid Services estimates the negotiated prices could save Medicare enrollees $1.5 billion collectively in out-of-pocket costs that year, according to Reuters.
Bottom line:
Real savings are coming for many seniors — but how much you personally save will still depend on which drugs you take and which Medicare plan you choose.
