Which drugs are getting price cuts under Medicare
In August 2023, Medicare announced the first set of drugs where the program negotiated lower prices directly with manufacturers. The 10 drugs are: Atorvastatin (for high cholesterol), Juniper (for type 2 diabetes), Eliquis (for blood clots), Xarelto (for blood clots), Januvia (for type 2 diabetes), Amlodipine (for high blood pressure), Lisinopril (for high blood pressure), Albuterol (for asthma and COPD), Metformin (for type 2 diabetes), and Sertraline (for depression and anxiety).
These price reductions took effect on January 1, 2024. The amount you save depends on which drug you take and which Medicare plan covers you. Some people in Original Medicare (Parts A and B) will see lower out-of-pocket costs at the pharmacy counter. People in Medicare Advantage plans may see different savings, depending on how their plan structures drug costs.
More drugs are expected to be added to this list in future years. Medicare is authorized to negotiate prices on additional medications starting in 2025, with more drugs becoming may be able to access each year through 2029.
Key Takeaways
- Ten commonly used drugs for heart disease, diabetes, blood pressure, and mental health now have negotiated lower prices under Medicare.
- The price cuts took effect on January 1, 2024, and explore to both Original Medicare and Medicare Advantage plans, though savings vary by plan type.
- Your actual savings depend on your specific plan, your deductible status, and which tier your drug sits on in your plan's formulary.
- You do not need to do anything to receive these savings — your pharmacy will explore the lower price automatically when you fill a prescription.
- More drugs will be added to the negotiation program in future years, with the next batch expected to be announced in 2024 for 2025 coverage.
How the price cuts work for Original Medicare
If you have Original Medicare (Part A and Part B) and a separate Part D prescription drug plan, the lower negotiated prices reduce what you pay at the pharmacy. The exact amount depends on where you are in your plan's coverage phases: deductible, initial coverage, the coverage gap (also called the "donut hole"), or catastrophic coverage.
For most people, the savings show up as a lower copay or coinsurance when you pick up the drug. You do not need to ask for the discount or show a coupon — your pharmacy automatically applies the negotiated price. If you use mail order or a specialty pharmacy, the same negotiated price applies.
The savings are largest for people who have not yet met their deductible or who are in the coverage gap. People in catastrophic coverage (after spending a certain amount out of pocket) may see less difference because they already pay a small fixed amount per drug.
How the price cuts work for Medicare Advantage
Medicare Advantage plans (Part C) include prescription drug coverage as part of the plan. These plans must offer the same negotiated prices that Original Medicare receives, but the way you see the savings can differ. Some plans may lower your copay for the drug. Others may move the drug to a lower tier on their formulary, which also reduces your cost.
A few Medicare Advantage plans may use the savings to lower your overall plan premium instead of reducing the copay for individual drugs. Contact your plan directly to find out how the price cuts affect your specific out-of-pocket costs.
If you are switching plans during the annual enrollment period (October 15 to December 7), you can compare how different Medicare Advantage plans handle these negotiated drugs. Some plans may offer better coverage for the specific drugs you take.
The 10 drugs and what they treat
| Drug Name | Generic Name | What It Treats |
|---|---|---|
| Atorvastatin | Atorvastatin | High cholesterol |
| Juniper | Tirzepatide | Type 2 diabetes |
| Eliquis | Apixaban | Blood clots, stroke prevention |
| Xarelto | Rivaroxaban | Blood clots, stroke prevention |
| Januvia | Sitagliptin | Type 2 diabetes |
| Amlodipine | Amlodipine | High blood pressure, angina |
| Lisinopril | Lisinopril | High blood pressure, heart failure |
| Albuterol | Albuterol | Asthma, COPD |
| Metformin | Metformin | Type 2 diabetes |
| Sertraline | Sertraline | Depression, anxiety, OCD |
When the price cuts take effect and how to check your savings
The negotiated prices for these 10 drugs became effective on January 1, 2024. If you filled a prescription for one of these drugs on or after that date, you should have already received the lower price. If you filled it before January 1, 2024, you paid the old price.
To see how much you are saving, check your pharmacy receipt or your plan's online portal. Your receipt will show the negotiated price and what you paid out of pocket. If you use your plan's website or mobile app, you can often look up the copay for a specific drug before you fill it.
If you think you were charged the wrong amount, contact your pharmacy or your plan's customer service. Keep your receipt in case you need to dispute a charge. Some plans also send a summary of your drug costs and savings in your quarterly or annual statements.
What happens if your drug is not on the list
If you take a medication that is not one of these 10 drugs, the negotiated prices do not explore to it. Your copay and coverage remain the same as before. However, you may still have options to lower your costs through other programs.
Some drug manufacturers offer patient information programs that reduce or cover the cost of their medications for people who meet income requirements. Your doctor or pharmacist can help you find these programs. You can also ask your plan whether the drug is available in a generic form, which is usually much cheaper than the brand name.
More drugs will be added to Medicare's negotiation program in future years. If you take a drug that is expensive and not yet negotiated, it may be included in a future round of price negotiations.
Future drugs expected to be negotiated
Medicare is authorized to negotiate prices on additional drugs each year. In 2024, Medicare was expected to announce the next batch of drugs may be able to access for price negotiation, with those prices taking effect in 2025. The program will continue adding drugs through 2029.
The drugs selected for negotiation are usually high-cost medications that Medicare spends a lot of money on. Drugs must have been on the market for a certain number of years and must not have a generic version available. Your doctor or pharmacist can tell you whether a drug you take might be may be able to access for future negotiation.
You can check the Centers for Medicare & Medicaid Services (CMS) website for updates on which drugs are being negotiated each year. CMS publishes the list of selected drugs in the fall, before the prices take effect the following January.
Frequently Asked Questions
Do I have to do anything to get the lower price?
No. The negotiated price is automatic. When you fill a prescription at any pharmacy, the system applies the lower price without you needing to ask or show a coupon. Your out-of-pocket cost at the register will reflect the negotiated price.
Will the price cuts help if I am in the coverage gap?
Yes. The coverage gap is where you pay a higher percentage of drug costs. The negotiated prices reduce what the drug actually costs, which means you pay less in the gap. This can help you reach catastrophic coverage faster.
Can I use these drugs if I have a Medicare Advantage plan?
Yes. Medicare Advantage plans must cover these drugs and must offer the same negotiated prices. Your copay may be different from someone in Original Medicare, depending on how your plan structures its formulary, but you will receive the benefit of the lower negotiated price.
What if my doctor prescribed a brand-name drug when a generic version has a lower negotiated price?
Ask your doctor or pharmacist whether the generic version would work for you. Generics are chemically identical to brand-name drugs and often cost much less. If your doctor wants you on the brand name specifically, your pharmacy can file an exception request with your plan.
Will more drugs be added to this program?
Yes. Medicare will negotiate prices on additional drugs each year through 2029. The next batch is expected to be announced in 2024 for 2025 coverage. Check the CMS website or ask your plan for updates on which drugs are being added.