Medications for Diabetes, HIV, Cancer, and Chronic Conditions Among Latest Round of Federal Bargaining
The federal government has identified its newest batch of high-cost prescription medications that will undergo direct price negotiations with pharmaceutical manufacturers under a landmark Medicare program — a move officials say could translate into substantial savings for both taxpayers and the elderly Americans who depend on these treatments.
The 15 medications announced Tuesday span a wide range of chronic and serious health conditions, including Type 2 diabetes, HIV, rheumatoid arthritis, several forms of cancer, psoriasis, inflammatory bowel disease, chronic respiratory illness, and clinical depression. Together, these drugs were used by approximately 1.8 million Medicare enrollees over the past year and collectively accounted for roughly 6 percent of combined spending under Medicare Part B and Part D, according to federal data.
“American seniors and the taxpayers who fund their healthcare have shouldered the burden of spiraling prescription drug costs for far too long,” said Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services, in an official statement. “Under President Trump’s direction, CMS is aggressively targeting the costliest medications in the Medicare system, pursuing equitable pricing, and ensuring the program serves patients rather than entrenched special interests.”
The announcement, which CMS was required to make by a February 1 statutory deadline, represents the third successive round of negotiations authorized under a 2022 federal law. When the newly negotiated prices take effect in 2028, a cumulative total of 40 prescription drugs will have undergone the federal bargaining process — a rapid expansion of a program that has already begun delivering lower costs for some of the most widely prescribed medications in the country.
Which Medications Made the List?
The Complete 2026 Negotiation Roster
The 15 drugs selected for this year’s negotiations — plus one previously negotiated medication slated for renegotiation — encompass treatments prescribed across numerous medical specialties:
| Medication | Primary Condition(s) Treated |
|---|---|
| Trulicity | Type 2 diabetes |
| Biktarvy | HIV |
| Botox / Botox Cosmetic | Migraines, overactive bladder, muscle spasticity (Medicare-covered indications only) |
| Cosentyx | Psoriasis, psoriatic arthritis, ankylosing spondylitis |
| Entyvio | Ulcerative colitis, Crohn’s disease |
| Xeljanz / Xeljanz XR | Rheumatoid arthritis, psoriatic arthritis, ulcerative colitis |
| Orencia | Rheumatoid arthritis, juvenile idiopathic arthritis |
| Cimzia | Crohn’s disease, rheumatoid arthritis, psoriasis |
| Anoro Ellipta | Chronic obstructive pulmonary disease (COPD) |
| Xolair | Severe asthma, chronic hives, nasal polyps, food allergies |
| Rexulti | Major depressive disorder, schizophrenia, Alzheimer’s-related agitation |
| Erleada | Prostate cancer |
| Kisqali | Breast cancer |
| Verzenio | Breast cancer |
| Lenvima | Thyroid cancer, liver cancer, kidney cancer, endometrial cancer |
| Tradjenta (renegotiation) | Type 2 diabetes |
Several of these medications rank among Medicare’s highest-expenditure drugs, making them prime candidates for negotiations that could yield meaningful spending reductions across the program.
A Notable First: Part B Drugs Enter the Arena
This negotiation cycle marks a significant procedural expansion. For the first time since the program’s inception, medications reimbursed under Medicare Part B are eligible for inclusion. Part B covers outpatient prescriptions that are typically administered in clinical settings — infusions, injections, and other treatments delivered at physician offices, hospital outpatient departments, or specialized treatment centers.
Previous negotiation rounds were limited to drugs covered under Medicare Part D, the program’s retail pharmacy benefit. By extending the program’s reach to Part B medications, the government can now target some of the most expensive per-dose treatments in the Medicare system — biologics, cancer therapies, and other specialty medications that are administered by healthcare professionals rather than picked up at a pharmacy counter.
This expansion substantially broadens the universe of drugs potentially subject to future negotiations and signals the program’s evolution from a narrowly focused pilot into a more comprehensive cost-containment mechanism.
The Botox Distinction
The inclusion of Botox on the negotiation list drew particular attention given the medication’s widespread association with cosmetic procedures. Federal officials were careful to clarify that price negotiations will apply exclusively to Medicare-approved therapeutic uses of the drug — principally chronic migraine treatment, overactive bladder management, and certain muscle spasticity conditions.
Botox’s cosmetic applications, including wrinkle reduction and other aesthetic treatments, are not covered by Medicare and therefore fall outside the negotiation program’s scope. The drug’s manufacturer, AbbVie, markets the therapeutic and cosmetic formulations under slightly different brand names, though the active ingredient — onabotulinumtoxinA — is identical.
How the Negotiation Program Works
Legal Foundation
The Medicare Drug Price Negotiation Program was established through the Inflation Reduction Act (IRA), signed into law in August 2022. The legislation granted Medicare — for the first time in the program’s nearly six-decade history — the authority to directly negotiate prescription drug prices with pharmaceutical manufacturers.
Previously, federal law explicitly prohibited Medicare from bargaining over drug costs, a restriction that had been in place since the creation of the Part D prescription drug benefit in 2003. This prohibition was long criticized by healthcare economists, patient advocacy organizations, and lawmakers from both parties as a primary driver of inflated drug spending within the Medicare system.
Selection Criteria
CMS identifies negotiation candidates based on several factors:
- Total Medicare expenditure: Drugs that account for the highest aggregate spending within Part B or Part D receive priority consideration
- Duration on market: Only medications that have been available for a specified number of years without generic or biosimilar competition are eligible
- Absence of competition: Drugs facing robust generic or biosimilar competition are generally excluded, as market forces are presumed to be already constraining their prices
- Enrollee utilization: The number of Medicare beneficiaries using the medication factors into selection decisions
Negotiation Timeline
Once drugs are selected, CMS enters into a structured negotiation process with each manufacturer:
- Drug selection announced (by February 1 of the negotiation year)
- Manufacturers provide proprietary cost and pricing data to CMS
- CMS develops an initial offer based on analysis of production costs, research investment, market comparators, and therapeutic value
- Negotiation period: CMS and manufacturers exchange offers and counteroffers over several months
- Maximum fair price established (by August 1 of the negotiation year)
- Negotiated prices published and take effect two years later
Manufacturers that refuse to participate face steep financial penalties — an excise tax starting at 65 percent of the drug’s U.S. sales and escalating over time, or the option to withdraw all of their products from Medicare and Medicaid coverage entirely. These enforcement provisions are designed to make non-participation economically untenable for virtually any major pharmaceutical company.
The Program’s Track Record So Far
Three Rounds, 40 Drugs
The current announcement brings the cumulative total of drugs subject to Medicare price negotiations to 40 across three annual cycles:
Round One (announced 2023, prices effective January 2025): The Biden administration selected 10 drugs, including the blockbuster blood thinner Eliquis, the diabetes medication Jardiance, and several other high-expenditure Part D medications. Negotiated prices for these first 10 drugs took effect at the beginning of 2025, with CMS reporting discounts ranging from 38 to 79 percent off prior Medicare prices.
Round Two (announced 2024, prices effective 2027): An additional 15 drugs were selected, including the enormously popular GLP-1 receptor agonist medications Ozempic, Rybelsus, and Wegovy — used for diabetes management and weight loss — along with treatments for blood cancers, autoimmune conditions, and heart failure. Negotiated prices for these drugs were finalized in November 2024 and will become available to beneficiaries starting in 2027.
Round Three (announced 2025, prices effective 2028): The current batch of 15 drugs, plus the renegotiation of Tradjenta, targeting conditions from HIV to breast cancer to chronic lung disease.
Early Results
While the program is still in its early stages — negotiated prices for only the first 10 drugs have actually gone into effect — initial data suggests meaningful cost reductions. CMS has projected that the Round One negotiations alone will save Medicare approximately $6 billion in the first year of implementation, with additional savings accruing in subsequent years as more negotiated prices come online.
For individual beneficiaries, the savings can be substantial. Some enrollees using the first 10 negotiated drugs have seen their out-of-pocket costs drop by hundreds or even thousands of dollars annually, depending on their plan structure, coverage phase, and dosing regimen.
Industry and Advocacy Reactions
Patient Advocates Celebrate
AARP, the nation’s largest advocacy organization for older Americans, enthusiastically endorsed the latest round of selections.
“This represents a meaningful step forward for the millions of seniors who struggle with unaffordable medication costs,” said Dr. Myechia Minter-Jordan, AARP’s chief executive. “Reducing prescription drug prices consistently ranks as a top priority for older Americans regardless of their political affiliation, and we commend the Administration for safeguarding Medicare’s capacity to address that need.”
The announcement also received backing from various patient advocacy groups focused on the specific conditions treated by the selected medications, including diabetes organizations, HIV/AIDS advocacy groups, and cancer patient coalitions.
Pharmaceutical Industry Pushes Back
The pharmaceutical industry’s primary trade association, the Pharmaceutical Research and Manufacturers of America (PhRMA), reiterated its longstanding opposition to the program’s legal framework.
“The Inflation Reduction Act continues to demonstrate why government-imposed price controls represent the wrong approach for American patients,” said Elizabeth Carpenter, PhRMA’s executive vice president for policy and research. The organization argued that policymakers genuinely interested in reducing consumer drug costs should instead focus regulatory attention on insurance companies and pharmacy benefit managers (PBMs) — the intermediary firms that negotiate drug discounts and manage formularies on behalf of health plans.
PhRMA and individual pharmaceutical manufacturers have filed multiple legal challenges against the negotiation program, arguing that it violates constitutional protections against government compulsion and amounts to price-fixing rather than genuine negotiation. While several federal courts have ruled against the industry’s challenges, litigation continues on various fronts.
The industry contends that government-dictated pricing will ultimately reduce investment in pharmaceutical research and development, slowing the pipeline of innovative new treatments. Supporters of the program counter that current drug pricing in the United States dramatically exceeds prices for identical medications in other developed nations and that manufacturer profit margins leave ample room for negotiated reductions without jeopardizing innovation.
The PBM Debate
PhRMA’s redirection toward pharmacy benefit managers reflects an intensifying policy debate about the role these companies play in the drug pricing ecosystem. PBMs — dominated by three firms (CVS Caremark, Express Scripts, and OptumRx) that collectively manage prescriptions for the vast majority of insured Americans — negotiate rebates and discounts from manufacturers on behalf of health plans.
Critics of PBMs, including many pharmaceutical manufacturers and some patient advocacy groups, argue that these intermediaries retain a significant share of negotiated discounts rather than passing them through to consumers, and that their complex rebate structures obscure actual drug prices and create perverse incentives that can steer patients toward higher-cost medications.
PBMs counter that they deliver substantial net savings to health plans and their members and that eliminating their role would actually increase drug costs. The debate over PBM regulation and transparency has gained bipartisan attention in Congress, with several legislative proposals introduced in recent sessions.
What This Means for Medicare Beneficiaries
Timeline for Savings
Seniors currently taking the 15 newly selected medications should understand that negotiated prices will not take effect immediately. The structured timeline means that reduced costs from this round of negotiations will begin flowing to beneficiaries in January 2028 — approximately three years from the announcement date.
In the interim, prices for these medications will continue to be determined by existing agreements between manufacturers, PBMs, and Part B/Part D plan sponsors. Beneficiaries currently struggling with high out-of-pocket costs for these drugs should explore available assistance programs:
- Medicare Extra Help/Low-Income Subsidy: Federal program that helps with Part D premiums, deductibles, and copayments for qualifying low-income enrollees
- Manufacturer Patient Assistance Programs: Most of the companies producing these medications operate programs offering free or reduced-cost drugs to qualifying patients
- State Pharmaceutical Assistance Programs (SPAPs): Many states operate supplementary drug assistance programs for Medicare beneficiaries
- Medicare Part D coverage gap provisions: The Inflation Reduction Act capped annual out-of-pocket Part D drug spending at $2,000 beginning in 2025, providing immediate relief for beneficiaries with high medication costs regardless of negotiation timelines
The Broader Cost-Containment Landscape
The negotiation program operates alongside several other IRA provisions designed to reduce drug costs for Medicare enrollees:
- Annual out-of-pocket spending cap: Part D enrollees now benefit from a $2,000 annual ceiling on their prescription drug out-of-pocket costs, eliminating the previous structure that could expose patients with expensive medications to thousands of dollars in annual spending
- Inflation rebates: Manufacturers that raise drug prices faster than the general inflation rate must pay rebates to Medicare, creating a financial disincentive for excessive price increases
- Insulin cost caps: Monthly insulin costs for Medicare enrollees are capped at $35, regardless of the type of insulin or the quantity used
Together, these provisions represent the most significant restructuring of Medicare’s prescription drug benefit since Part D was created in 2003.
Looking Ahead: Future Negotiation Rounds
Expanding Scope
The IRA authorizes continuing annual expansions of the negotiation program. Beginning in 2029, CMS will be empowered to negotiate prices for up to 20 additional drugs per year, further broadening the program’s reach across the Medicare formulary.
Over time, the cumulative effect of these annual negotiation rounds could reshape the pharmaceutical pricing landscape in the United States. As more high-expenditure drugs cycle into the program, the share of Medicare drug spending subject to negotiated prices will grow substantially — potentially influencing pricing dynamics beyond Medicare as well, as commercial insurers and employers may use Medicare’s negotiated prices as benchmarks in their own contract discussions.
Drugs to Watch
Healthcare policy analysts are already speculating about which medications might appear in future negotiation rounds. High-expenditure drugs in therapeutic categories like oncology, autoimmune disease, neurology, and rare diseases are considered likely candidates. The continued expansion of Part B eligibility opens the door to costly hospital-administered and physician-office treatments that were previously beyond the program’s reach.
The political durability of the negotiation program also bears watching. While both the Biden and Trump administrations have implemented the program, pharmaceutical industry lobbying efforts to modify or constrain it continue. Congressional action could either accelerate the program’s expansion or impose new limitations, depending on future legislative dynamics.
