How much retirees may save in 2026

The first 10 drugs subject to new Medicare price negotiations will go into effect on Jan. 1, prompting substantial out-of-pocket savings for certain older Americans who rely on those medications. Enrollees in Medicare Part D prescription drug plans may see their out-of-pocket costs for the negotiated drugs fall by an average of more than 50% in 2026, according to new research from AARP, a nonprofit representing Americans ages 50 and over.

Moreover, enrollees may pay less than $100 per month for 7 of the 10 negotiated drugs next year, AARP’s research found. The new Medicare Part D prescription drug price negotiations were enacted with the Inflation Reduction Act in 2022. About 9 million Medicare Part D enrollees use the first 10 prescription drugs selected for price negotiations in 2026, according to AARP. The treatments are used for a variety of conditions, including autoimmune diseases, cancer, diabetes, and heart disease.

Medicare Drug Price Negotiations

In 2026, the Medicare drug price negotiations may save Medicare Part D enrollees $1.5 billion in out-of-pocket expenses, the Centers for Medicare & Medicaid Services has estimated. The Inflation Reduction Act requires Medicare to identify high-cost drugs and negotiate lower prices on behalf of beneficiaries and taxpayers who help fund the program, Nancy LeaMond, chief advocacy and engagement officer at AARP, said during a Dec. 18 briefing on the research.

“We often talk about issues in terms of policy and data, but beyond the numbers, this is about the people in our lives, parents, grandparents, friends, and neighbors, who will finally see relief from the high drug costs and the fear that the price of needed medications will spiral out of control,” LeaMond said. The Inflation Reduction Act also raises the annual Medicare Part D out-of-pocket spending cap to $2,100 per beneficiary in 2026, up from $2,000, the first amount established under the law in 2025.

Cost Savings for Medicare Beneficiaries

Overall, Medicare enrollees will see their costs for the negotiated drugs drop by an average of 51%, AARP found based on an analysis of changes in 56 stand-alone plans between 2025 and 2026. In five states that have high Medicare enrollment, enrollee cost-sharing will decrease by an average of about 50% for the 10 negotiated drugs, AARP found.

Of the states included in the research, Floridians are poised to see the biggest average reduction of 54%. That is followed by Pennsylvania, with 53%; California and New York, each with 50%; and Texas, 48%. Average monthly enrollee costs for the 10 drugs are projected to fall from 2025 to 2026, according to AARP’s analysis of certain stand-alone plans.

Drug-Specific Savings

Based on the research, the drug that may offer the biggest dollar cost reduction is Stelara, used to treat autoimmune conditions. Average monthly enrollee costs for that treatment may drop by $5,046 — or 68% — in 2026 based on AARP’s analysis of data on the Medicare Plan Finder website.

Stelara

Treatment for: autoimmune conditions
2025 average monthly cost: $7,425
2026 average monthly cost: $2,379
Potential savings: 68%

Imbruvica

Treatment for: cancer
2025 average monthly cost: $4,983
2026 average monthly cost: $2,813
Potential savings: 44%

Enbrel

Treatment for: autoimmune conditions
2025 average monthly cost: $2,265
2026 average monthly cost: $619
Potential savings: 73%

Farxiga

Treatment for: diabetes and heart disease
2025 average monthly cost: $141
2026 average monthly cost: $39
Potential savings: 73%

Jardiance

Treatment for: diabetes
2025 average monthly cost: $103
2026 average monthly cost: $43
Potential savings: 58%

Eliquis

Treatment for: blood clots
2025 average monthly cost: $110
2026 average monthly cost: $51
Potential savings: 53%

Xarelto

Treatment for: blood clots
2025 average monthly cost: $103
2026 average monthly cost: $45
Potential savings: 56%

Entresto

Treatment for: chronic heart failure
2025 average monthly cost: $118
2026 average monthly cost: $64
Potential savings: 46%

Januvia

Treatment for: diabetes
2025 average monthly cost: $62
2026 average monthly cost: $27
Potential savings: 57%

NovoLog

Treatment for: diabetes
2025 average monthly cost: $33
2026 average monthly cost: $27
Potential savings: 16%

To be sure, the Medicare drug price reductions are based on AARP’s analysis of available data. Additional research is needed to evaluate the full effects of the Medicare drug price negotiations, according to AARP. Because the findings are averages, the differences may vary among individual plans, the organization states in its research.

Because individuals may see variations in drug price changes across available plans, AARP said it is still important to reevaluate plan coverage every year. Enrollees in private Medicare Advantage insurance plans may shop around for new coverage during an open enrollment period from Jan. 1 through March 31. All Medicare beneficiaries can opt to switch coverage during annual open enrollment from Oct. 15 through Dec. 7. Other initial and special enrollment periods may apply, based on individual circumstances.

Read more about the Medicare drug price negotiations and their potential impact on beneficiaries Here

Smart Tip for Readers

When reviewing your Medicare Part D prescription drug plan, make sure to check the list of covered medications and their corresponding costs to ensure you’re getting the best coverage for your specific needs. Consider consulting with a licensed insurance professional or a patient advocate to help navigate the process and maximize your savings.