The Inflation Reduction Act gave Medicare authority to negotiate prices on a small number of high-spending drugs that face no generic or biosimilar competition. The first ten negotiated prices took effect at the start of 2026, with reductions ranging from 38% to 79% off the drugs' 2023 list prices. Eliquis, a blood thinner and the highest-spending drug on the list, moved from a list price around $592 for a month's supply to roughly $231.
The Centers for Medicare and Medicaid Services projected roughly $6 billion in savings to the program in the first year, plus about $1.5 billion in reduced out-of-pocket costs for people taking those drugs. Those are projections rather than settled figures, and what an individual patient actually pays still depends on their plan's tier structure and copay design.
Ten products out of thousands sounds like a rounding error, and critics of the program have made that argument. But Medicare drug spending is heavily concentrated. Those ten drugs accounted for about $50.5 billion in Part D spending in 2023, close to 20% of total gross Part D drug costs. Concentration is precisely why a narrow program can reach a wide share of the bill.
The second round expands it. Fifteen additional drugs have negotiated prices scheduled for 2027, covering roughly $42.5 billion in gross Part D spending on behalf of about 5.7 million beneficiaries, with CMS estimating savings near $12 billion. Whether that pace counts as aggressive or cautious is itself part of the argument.
Alongside negotiation, the same law capped what Part D enrollees pay out of pocket for prescriptions at $2,000 a year, effective January 2026, replacing a structure that had no ceiling at all. For people on expensive specialty drugs, that is a far larger change to household finances than the negotiated prices themselves.
Surveys have consistently found patients skipping doses, splitting pills, or leaving prescriptions unfilled because of cost, and that kind of cost-related nonadherence is associated with worse outcomes and higher spending on hospitalization later. Supporters argue predictability matters as much as the average price. Critics note the cap does not make the spending disappear, it moves it into premiums and general revenue.
The strongest argument against negotiation is that lower prices reduce the expected return on risky drug development. One analysis of the first negotiation round estimated that the eleven manufacturers involved would collectively develop about 0.62 fewer novel drugs as a result, while also concluding those firms were positioned to absorb much of the effect through other revenue or cost reductions.
Both sides can read that number honestly. Supporters see a small cost against billions in savings. Opponents point out it covers only the first ten drugs, and that the effect compounds as the program scales toward twenty additional drugs a year. Nobody serious argues the tradeoff is zero; the disagreement is about its size and whether it is worth it.
The left generally argues that Americans pay more than patients in comparable countries for identical products, that Medicare's prior inability to negotiate was an artificial constraint no other large purchaser faced, and that concentrated spending makes a targeted program effective. The right generally argues that administrative price setting substitutes a formula for market signals, that middlemen capture much of the gap between list and net prices, and that the innovation cost is understated.
One point of genuine overlap: reformers on both sides have targeted pharmacy benefit managers, whose rebates are confidential and often calculated as a percentage of list price, creating an incentive to keep list prices high. That is one of the few areas where the two camps propose similar fixes.
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