Medicare beneficiaries could see out-of-pocket prescription drug costs cut by more than half in 2026, according to a new AARP analysis.
The savings stem from the first round of drug price negotiations under the Inflation Reduction Act, affecting 10 widely used brand-name drugs.
In contrast, another report shows drugmakers planning price hikes on at least 350 other medicines in 2026, potentially offsetting some broader cost relief.
As millions of Americans start 2026, a new AARP report highlights dramatic savings on prescription drugs for Medicare beneficiaries, while a separate industry forecast warns that price increases on hundreds of other medications may temper overall relief.
According to AARP’s latest analysis, out-of-pocket costs for the first 10 drugs subject to Medicare’s price negotiation program are expected to fall by an average of more than 50% beginning January 1. These negotiated prices — made possible by the Inflation Reduction Act of 2022 — could save Medicare Part D enrollees an estimated $1.5 billion in total out-of-pocket spending next year.
The negotiated drugs include treatments for conditions such as heart disease, diabetes, rheumatoid arthritis, and autoimmune disorders — and cover medications used by nearly 9 million seniors across the country. Under the new pricing, most beneficiaries taking these drugs will see significantly smaller copayments and coinsurance costs, which advocates say will improve access to essential therapies.
More affordable lifesaving medicine
“Medicare prescription drug negotiation is on track to deliver billions in savings for America’s seniors starting in January, making lifesaving medication more affordable,” said AARP Executive Vice President Nancy LeaMond in a statement accompanying the report.
However, the broader prescription drug market tells a more complex story. In a report released late this week, industry data show that drugmakers are planning price increases on at least 350 branded medicines in 2026, including widely used vaccines and cancer treatments. The median planned price hike is roughly 4%, similar to increases in 2025.
Companies such as Pfizer, Sanofi, and GSK are among those proposing higher prices on a range of products, from COVID-19 vaccines to oncology therapies. Critics argue that these increases could erode some of the gains from Medicare’s negotiated savings for non-Medicare patients and for drugs not yet subject to negotiation.
Systemic price pressures
Health policy experts contend that while Medicare’s negotiation program marks a significant shift toward affordability for seniors, systemic drug pricing pressures remain. “Partial cuts and negotiated deals do little to address the underlying issue of high list prices,” one analyst noted, pointing to the planned price increases.
Looking ahead, the Medicare program plans to negotiate prices on additional medications in subsequent years, with 15 more drugs slated for negotiation in 2027 and further expansions in the years after.