Medicare enrollees in five large states are poised to pay about fifty percent less out of pocket for some widely used prescription drugs starting Jan. 1, 2026, as Medicare drug price cuts 2026 take effect following federal price negotiations, according to a new AARP study.
The analysis, released Thursday, examines the first round of Medicare drug price negotiations authorized under the Inflation Reduction Act of 2022. It finds that beneficiaries in California, Florida, New York, Pennsylvania and Texas will see steep reductions for ten high-cost medications once the negotiated prices take effect.
AARP Study Shows Sharp Cost Drops in Five High-Enrollment States
AARP reported that out-of-pocket costs for the ten drugs will fall by an average of forty-eight percent to fifty-four percent across the five states, all of which have some of the nation’s largest Medicare populations and are expected to benefit significantly from Medicare drug price cuts 2026.
In California and New York, costs are projected to drop by about fifty percent. Florida enrollees will see the largest average decline at fifty-four percent, followed by Pennsylvania at fifty-three percent and Texas at forty-eight percent, according to the study.
“These savings mean Medicare enrollees could save roughly half of what they usually pay for certain drugs next year,” the AARP report said, noting that the reductions apply once the negotiated prices begin in 2026.
The study also found that seven of the ten drugs will have an average monthly cost sharing of less than $100 in the five states, compared with only two drugs at that level this year.
Negotiated Prices Target Widely Used Treatments Under Part D
The medications included in the first negotiation cycle treat chronic and costly conditions such as heart disease, diabetes, cancer, autoimmune disorders and chronic kidney disease. All are partially covered under Medicare Part D, the program’s prescription drug benefit.
The Centers for Medicare and Medicaid Services selected the drugs for negotiation: Eliquis, Enbrel, Entresto, Farxiga, Fiasp, Novolog, Imbruvica, Januvia, Jardiance, Stelara and Xarelto.
Supporters of the policy say the focus on widely prescribed drugs increases the potential impact for seniors and people with disabilities who rely on Medicare and often face high out-of-pocket costs.
The Inflation Reduction Act, signed into law in 2022, marked the first time Medicare was allowed to directly negotiate prices with drug manufacturers, a shift aimed at lowering costs for beneficiaries and the federal government.
Federal Negotiations Expand to More Drugs in Future Rounds
Federal officials say the initial savings are part of a broader effort to curb prescription drug spending. Last month, the Trump administration announced negotiated prices for fifteen additional drugs set to begin in 2027, including diabetes and weight loss medications Ozempic and Wegovy.
CMS said enrollees “will save roughly $685 million in out-of-pocket costs” from those negotiated prices once they take effect, building on the foundation laid by Medicare drug price cuts 2026.
Under that agreement, Ozempic, Rybelsus and Wegovy will cost $274 in 2027, down from about $959 today, CMS said. Tradjenta, another diabetes drug, will drop to $78 from $488, following expanded negotiations beyond Medicare drug price cuts 2026.
Policy analysts note that while the savings do not apply to all medications, the negotiated prices represent a significant change for Medicare’s roughly sixty-five million beneficiaries.
AARP said it plans to continue tracking how negotiated prices affect seniors’ access and affordability as additional drugs are added in future negotiation cycles following Medicare drug price cuts 2026.
