Drug prices & Part D
Prescription Drug Prices Posted Their Steepest Annual Drop in Decades, but Reconciliation Law Exemptions Could Cost Some Medicare Enrollees Thousands
The Consumer Price Index showed drug prices fell 3.1 percent year-over-year, the biggest drop since 1963, while the Medicare Rights Center warns that exemptions added by the 2025 reconciliation law could raise Medicare costs by nearly 4 billion dollars and leave some enrollees spending roughly 3,000 dollars more per year.
By the Goodsurance editorial teamAugust 22, 2026
Prescription drug prices fell 3.1 percent from a year earlier according to the latest Consumer Price Index, the largest year-over-year decline since 1963. A Medicare Rights Center analysis published August 20, 2026 credited a combination of factors: the arrival of lower-cost generic and biosimilar products for high-cost medicines and the drug price negotiation authority that Congress granted to Medicare under the Inflation Reduction Act.
Negotiated prices for the first ten Medicare Part D drugs took effect in 2026, reaching roughly nine million beneficiaries who use those medicines for conditions including heart disease and diabetes.
Drug prices just posted a 60-year record decline, but new reconciliation law exemptions could cost some Medicare enrollees thousands more a year.
The Medicare Rights Center cautioned that the favorable headline does not tell the full story for Medicare enrollees. Exemptions added by the 2025 reconciliation law, commonly known as the One Big Beautiful Bill Act, expand which drugs are shielded from Medicare's price negotiation rules. Those exemptions are expected to raise Medicare's drug costs by nearly 4 billion dollars. Beneficiaries who rely on newly exempted medicines could face spending roughly 3,000 dollars more per year, the Medicare Rights Center said.
The analysis highlights two simultaneous trends in Medicare drug pricing: market competition and IRA-era tools are producing real savings in some areas, while recent legislative decisions have narrowed where those tools will apply going forward.
In plain words
Drug prices fell about 3 percent compared to last year. That is the biggest drop in about 60 years. Cheaper drug options and Medicare's new power to negotiate prices helped. But a big law passed in 2025 lets some drug companies skip those price talks. Because of that, some Medicare enrollees could pay around 3,000 dollars more each year for the medicines those companies make.
Understand the basics first
Source: Medicare Rights Center
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