Biden-Harris administration announces billions in savings through drug price negotiations

In a historic first, the Biden-Harris administration today announced the results of the first round of drug price negotiations made possible by the Inflation Reduction Act (IRA). For 2026, the first year the prices take effect, the administration projects that Medicare beneficiaries will save $1.5 billion in out-of-pocket costs. In total, Medicare is expected to save at least $6 billion in 2026 through the price reductions on 10 drugs. The savings will continue to increase in subsequent years.

The drugs selected for negotiation are associated with high Medicare spending and a lack of competition, among other issues. The resulting list includes drugs relied on by 8.8 million Medicare beneficiaries in 2023 to treat conditions such as cancer, diabetes, blood clots, heart failure, autoimmune diseases and chronic kidney disease.

As requested by the IRA, the government estimated the value of the drugs and set a fairer price rather than simply allowing drug manufacturers to set their prices as they saw fit.

As the following graph shows, the list prices for these drugs are reduced by 38-79%.

More drugs will be selected for negotiation in the coming years. The next 15 drugs to be negotiated will be announced later this year.

At Medicare Rights, we welcome this milestone that will curb rising drug prices and help older people afford their medicines while reducing costs to taxpayers. The impact of these negotiations will grow each year as more drugs are offered at prices that better reflect their value.

Read the announcement and information sheet.

Read more about the negotiated prices.

Read more about IRA provisions.