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Drug prices & Part D

Study: Medicare Drug Price Negotiations Cut Costs for Most Enrollees, but Not for Those Already Hitting the Annual Spending Limit

A research letter in Annals of Internal Medicine finds that patients on six of the first ten negotiated Part D drugs saw out-of-pocket costs fall 26 to 49 percent, while patients on the three highest-priced negotiated drugs saw no additional benefit because they were already reaching the annual cap.

By the Goodsurance editorial teamOctober 24, 2026

A research letter published October 2026 in Annals of Internal Medicine offers the first peer-reviewed accounting of how Medicare's Inflation Reduction Act drug price negotiations translated into actual savings for patients.

The answer depends on which drug a beneficiary takes and how much they spend in a year. Medicare's first negotiation cycle covered 10 high-cost Part D medications and produced final prices averaging 63 percent below 2023 list prices, with the range running from 38 to 79 percent off.

Medicare's negotiated drug price cuts helped most Part D enrollees, but patients who hit the annual spending cap first saw no extra savings.

For six of those ten drugs, whose users tended to stay below the annual Part D out-of-pocket limit, the researchers found meaningful reductions. Patients in standalone drug plans cut their annual spending by 33 to 49 percent, while those in Medicare Advantage drug plans saved 26 to 42 percent.

The picture looked different for the remaining three drugs, etanercept, ibrutinib, and ustekinumab, which are among the highest-priced medications in the negotiated group. Patients taking those drugs typically reached the annual Part D spending cap before year-end regardless of the negotiated price. Once an enrollee has hit the cap, additional drug costs are covered in full, so a lower negotiated price delivers no further out-of-pocket benefit.

The study also found that most Part D plans price these drugs using coinsurance rather than flat copayments, which means patient costs track closely with negotiated price reductions and that savings pass through more directly to enrollees than flat-dollar structures would allow.

The findings arrive as Medicare open enrollment for 2027 plans, which will carry newly negotiated prices on 15 more drugs, runs through December 7.

In plain words

Medicare made deals to lower the prices of 10 expensive drugs. A new study looked at whether patients actually paid less.

For most of the 10 drugs, the answer is yes. People in regular drug plans paid 33 to 49 percent less. People in Medicare Advantage drug plans paid 26 to 42 percent less.

But for three of the drugs, patients did not save money. Why? Those three drugs are so expensive that most people who take them already hit the yearly spending limit before the year ends. Once you hit that limit, Medicare covers everything. A lower price does not change your bill after that point.

The study also found that most Medicare drug plans charge a percentage of the drug price, not a flat fee. That means when the price drops, what you owe drops too.

Right now is Medicare open enrollment for 2027 plans. Fifteen more drugs will have lower negotiated prices next year. If you take a high-cost drug, check how your plan charges for it before December 7.

Understand the basics first

Source: AJMC
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