News: CMS announces lower drug prices effective in 2026

Last week, CMS announced in a press release it has successfully negotiated lower prices with drug makers for 10 high-cost, sole-source drugs. The new prices will become effective in 2026 for individuals with Medicare Part D coverage, the American Hospital Association (AHA) reported.

The list is made up of drugs that treat conditions such as heart disease, diabetes, and cancer. The new prices are estimated to save $1.5 billion in out-of-pocket costs for individuals with coverage, considering about nine million Medicare beneficiaries use at least one of the 10 drugs selected for negotiation. CMS also released a fact sheet that includes more information about the newly negotiated prices.

“Congressional budget estimators (Congressional Budget Office) predicted about $100 billion savings over 10 years from drug negotiations, and a $3.7 billion savings in the first year alone,” said United States Department of Health and Human Services Secretary Xavier Becerra in the press release. “Today we’re announcing that in our first year of negotiations we are saving Medicare an estimated $6 billion and Americans who pay out of pocket will be saving another $1.5 billion moving forward. Empowering Medicare to negotiate prices not only strengthens the program for generations to come, but also puts a check on skyrocketing drug prices.”

Editor’s note: To read AHA’s coverage of this story, click here. To read the CMS press release, click here.