AARP’s latest research shows Medicare beneficiaries could slash their out-of-pocket spending for certain prescriptions by roughly 50% next year.
Medicare Drug Negotiation Set to Slash Costs
The study, released Thursday, examines the first round of Medicare’s drug-price negotiations, which will take effect on Jan. 1, 2026. It finds that in five states-California, Florida, New York, Pennsylvania, and Texas-enrollees will pay significantly less for ten high-cost medications.
Key Drugs and Savings
The Centers for Medicare & Medicaid Services (CMS) identified the following ten drugs for the initial negotiation cycle:
- Eliquis
- Enbrel
- Entresto
- Farxiga
- Fiasp and Novolog
- Imbruvica
- Januvia
- Jardiance
- Stelara
- Xarelto
The AARP analysis reports the following reductions in out-of-pocket costs:
- California: 50% lower
- Florida: 54% lower
- New York: 50% lower
- Pennsylvania: 53% lower
- Texas: 48% lower
These savings apply to drugs used to treat heart disease, diabetes, autoimmune disorders, cancer, and chronic kidney disease.
Impact on Cost-Sharing
The study also notes that seven of the ten drugs will feature average monthly cost-sharing of less than $100 in the five states, a dramatic improvement from the two drugs that currently fall into that category.
Broader Implications and Next Steps
Last month, the Trump administration announced lower Medicare prices for 15 drugs-including Ozempic and Wegovy-effective in 2027. CMS stated that enrollees will save roughly $685 million in out-of-pocket costs as a result of those negotiated prices.
Under those negotiations, Ozempic, Rybelus, and Wegovy-used for Type 2 diabetes and weight loss-will cost $274 in 2027, down from $959 today. Tradjenta, another diabetes medication, will drop to $78 from $488.
Key Takeaways
- Medicare enrollees in California, Florida, New York, Pennsylvania, and Texas could see up to a 54% reduction in drug costs starting 2026.
- Seven of the ten negotiated drugs will have monthly cost-sharing below $100 in these states.
- The Trump administration’s 2027 price reductions could save enrollees $685 million in out-of-pocket expenses.
These findings highlight the tangible benefits of Medicare’s new drug-price negotiation authority, a provision enacted under the 2022 Inflation Reduction Act signed by former President Joe Biden.
