For the first time, Medicare will be able to directly negotiate the price of prescription drugs, as allowed under the Inflation Reduction Act. On Wednesday, HHS and CMS made the historic announcement of the first 10 drugs covered by Medicare Part D that will be subject to negotiations under the Medicare Drug Price Negotiation Program. These 10 drugs accounted for an estimated $50.5 billion, equal to 20% of total Part D gross covered prescription drug costs between June, 2022 and May, 2023.

The negotiations for these drugs will take place from October, 2023 till September, 2024 with the negotiated prices going into effect in 2026. CMS plans to expand this list of drugs over time with 15 more to be added to this list in 2027, and an additional 15 in 2028. After these first three rounds, CMS plans to negotiate prices for up to 20 additional drugs for each subsequent year.