On March 13, 2026, the Centers for Medicare & Medicaid Services (CMS) confirmed that all manufacturers of the 15 drugs selected for the third cycle of the Medicare Drug Price Negotiation Program have agreed to participate in negotiations. This marks a significant expansion of the program created by the Inflation Reduction Act (IRA), and for the first time, it includes drugs covered under Medicare Part B alongside Part D medications.
If you take any of these medications or are simply trying to understand how Medicare drug costs are changing, this article walks through what was announced, how the negotiation process works, and what it could mean for your prescription expenses.
Which Drugs Were Selected for the Third Cycle?
CMS selected 15 high-cost prescription drugs for negotiations in the third cycle. Between November 2024 and October 2025, approximately 1.8 million Medicare beneficiaries used these drugs, which together accounted for roughly $27 billion in combined Medicare Part B and Part D spending — about 6 percent of total Part B and Part D expenditures.
The selected drugs treat a range of serious health conditions:
Cancer treatments:
- Erleada (apalutamide) — prostate cancer
- Kisqali (ribociclib) — breast cancer
- Verzenio (abemaciclib) — breast cancer
- Lenvima (lenvatinib) — thyroid, liver, kidney, and endometrial cancers
Autoimmune and inflammatory conditions:
- Cosentyx (secukinumab) — psoriasis, psoriatic arthritis, ankylosing spondylitis
- Cimzia (certolizumab pegol) — Crohn's disease, rheumatoid arthritis, psoriatic arthritis
- Entyvio (vedolizumab) — Crohn's disease, ulcerative colitis
- Orencia (abatacept) — rheumatoid arthritis, juvenile idiopathic arthritis, psoriatic arthritis
- Xeljanz/Xeljanz XR (tofacitinib) — rheumatoid arthritis, ulcerative colitis, psoriatic arthritis
Other conditions:
- Trulicity (dulaglutide) — type 2 diabetes
- Biktarvy (bictegravir/emtricitabine/tenofovir) — HIV-1 infection
- Anoro Ellipta (umeclidinium/vilanterol) — chronic obstructive pulmonary disease (COPD)
- Rexulti (brexpiprazole) — major depressive disorder, schizophrenia, Alzheimer's-related agitation
- Botox/Botox Cosmetic (onabotulinumtoxinA) — chronic migraine, overactive bladder, muscle spasticity
- Xolair (omalizumab) — asthma, chronic hives, nasal polyps, food allergies
In addition to these 15 drugs, Tradjenta (linagliptin), a type 2 diabetes medication from the second cycle, was selected for renegotiation as part of this round.
A First for Part B Drugs
One of the most notable aspects of this third cycle is that it includes the first-ever Part B drugs in the negotiation program. The previous two cycles focused exclusively on Part D medications. Six of the drugs on this list — Botox, Cimzia, Cosentyx, Entyvio, Orencia, and Xolair — are commonly administered in clinical settings such as doctors' offices or infusion centers and are paid for, at least in part, under Medicare Part B.
This expansion means that the negotiation program now has the potential to lower costs for a broader range of treatments, including injectable and infused therapies that beneficiaries receive during outpatient visits.
A Look Back: Cycles 1 and 2
Understanding the third cycle is easier when you see the trajectory of the program so far.
Cycle 1: Ten Drugs, Effective January 1, 2026
The first cycle selected 10 Part D drugs for negotiation. These medications treat conditions such as diabetes, heart failure, blood clotting disorders, and autoimmune diseases. The drugs include Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and NovoLog/Fiasp.
Negotiated prices went into effect on January 1, 2026, and the discounts are significant. Compared to prior list prices, the reductions range from 38 percent to 79 percent depending on the drug. For example, the negotiated price for Januvia dropped 79 percent, and Eliquis went from a list price of $521 to $231 for a 30-day supply.
CMS estimated that if these negotiated prices had been in place during 2023, the Medicare program would have saved approximately $6 billion across the 10 drugs, a net savings of roughly 22 percent. For beneficiaries themselves, estimated out-of-pocket savings total about $1.5 billion in 2026.
Cycle 2: Fifteen Drugs, Effective January 1, 2027
The second cycle expanded the program to 15 Part D drugs, including several high-profile medications such as Ozempic, Wegovy, and Rybelsus (semaglutide for diabetes, cardiovascular disease, and obesity), Trelegy Ellipta (COPD and asthma), and Xtandi (prostate cancer). The full list also includes Pomalyst, Ibrance, Calquence, Ofev, Linzess, Xifaxan, Tradjenta, Janumet, Breo Ellipta, Austedo, Vraylar, and Otezla.
These negotiated prices take effect on January 1, 2027. The overall price reductions average roughly 44 percent across this group. Semaglutide products (Ozempic, Wegovy, Rybelsus) saw their prices drop by about 71 percent from list price. CMS estimated that if the negotiated prices had been in effect during 2024, the Medicare program would have saved approximately $12 billion, while beneficiary out-of-pocket costs would have decreased by about $685 million.
About 5.3 million beneficiaries use the drugs selected in cycle 2.
How the Negotiation Process Works
The Medicare Drug Price Negotiation Program follows a structured timeline each year. Here is how the process unfolds:
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Drug selection. CMS identifies drugs that account for the highest spending under Medicare Part D and, starting with cycle 3, Part B. The drugs must lack generic or biosimilar competition and must have been on the market for a specified number of years (at least 7 years for small-molecule drugs, 11 years for biologics).
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Manufacturer participation decision. Drug manufacturers have a window to decide whether to participate. If a manufacturer declines, it may face a steep excise tax on U.S. sales of the drug, which is designed to strongly encourage participation. For cycle 3, all manufacturers agreed to participate by the February 28, 2026 deadline.
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Initial offer. CMS sends an initial price offer to each manufacturer by June 1 of the negotiation year. This offer is based on clinical data, market context, and an analysis of how the drug is used within Medicare.
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Negotiation meetings. The manufacturer has 30 days to accept or counter the offer. If agreement is not reached immediately, up to two additional negotiation meetings may take place over the summer and fall.
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Final agreement. If an agreement still has not been reached, CMS provides a final offer by October 15, and the manufacturer must respond by November 1. The negotiation period then closes.
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Price takes effect. The negotiated Maximum Fair Price (MFP) takes effect at the start of the applicable year. For cycle 3, that date is January 1, 2028.
Cycle 3 Timeline at a Glance
| Milestone | Date | |---|---| | Drug selection announced | January 2026 | | Manufacturer participation confirmed | March 13, 2026 | | CMS sends initial price offers | By June 1, 2026 | | Negotiation meetings | Summer/Fall 2026 | | Negotiation period closes | November 1, 2026 | | Negotiated prices published | Late 2026 or early 2027 | | Negotiated prices take effect | January 1, 2028 |
The Growing Impact on Part D Costs
The negotiation program is designed to build momentum over time. Each cycle adds more drugs to the list, and future cycles will continue to grow in scope. Under the IRA, CMS will select 20 drugs per year starting with the fourth cycle (for prices effective in 2029 and beyond).
Looking at the cumulative picture so far:
- Cycle 1 (2026): 10 drugs, estimated $6 billion in Medicare savings, $1.5 billion in beneficiary out-of-pocket savings
- Cycle 2 (2027): 15 drugs, estimated $12 billion in Medicare savings, $685 million in beneficiary out-of-pocket savings
- Cycle 3 (2028): 15 drugs covering $27 billion in Medicare spending, with negotiated prices still to be determined
As more drugs enter the program and negotiated prices compound year over year, the total reduction in Medicare Part D (and now Part B) spending is expected to grow substantially. This also puts downward pressure on Part D premiums over time, since plan costs are a factor in premium calculations.
How Beneficiaries Benefit
If you take one of the drugs selected for negotiation, the most direct benefit is a lower price at the pharmacy or in your doctor's office. You do not need to take any special action. Once negotiated prices go into effect, your plan automatically reflects the reduced cost, which typically translates into lower copays or coinsurance.
But the benefits extend beyond just the negotiated drugs:
Lower out-of-pocket spending overall
When a drug you take has a negotiated price, you pay less toward your Part D deductible and cost-sharing for that medication. This means your total out-of-pocket spending for the year may be lower, even if you take other drugs that are not part of the negotiation program.
Slower progression toward the out-of-pocket cap
Because your spending on negotiated drugs is reduced, you accumulate out-of-pocket costs more slowly throughout the year. For some beneficiaries, this may mean that their total annual spending stays well below the cap, leaving more room in their budgets.
Broader program savings
Even if you do not take a negotiated drug, the program's reduction in overall Medicare spending can help keep Part D premiums more stable for all enrollees.
Interaction with the $2,100 Out-of-Pocket Cap
One of the most important IRA provisions for Part D enrollees is the annual out-of-pocket spending cap, set at $2,100 for 2026. Once your out-of-pocket spending on covered Part D drugs reaches this amount in a calendar year, you pay nothing more for covered prescriptions for the rest of that year.
The out-of-pocket cap and the negotiation program work together in meaningful ways:
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For beneficiaries who would exceed the cap: If you take expensive medications and your annual out-of-pocket costs would surpass $2,100 even with negotiated prices, the cap still protects you. You will not pay more than $2,100 regardless of how much your medications cost. However, the lower negotiated prices reduce costs for the Medicare program and your plan, which supports the long-term sustainability of the benefit.
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For beneficiaries near the cap: If your out-of-pocket spending would have been close to or slightly above $2,100, the negotiated prices may bring your total costs below the cap entirely. This means you could avoid hitting the catastrophic threshold and still have predictable, manageable drug expenses throughout the year.
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For beneficiaries well below the cap: If your drug costs are moderate, negotiated prices directly reduce what you pay at the pharmacy. Every dollar saved on a negotiated drug is a dollar that stays in your pocket.
It is also worth noting that the Part D maximum deductible for 2026 is $615, and the base beneficiary premium is approximately $36.78 per month. Negotiated prices can reduce how quickly you spend through your deductible phase, potentially saving you money from the very first fill of the year.
If managing monthly drug costs is a concern, remember that the Medicare Prescription Payment Plan allows you to spread your out-of-pocket Part D costs into predictable monthly installments with no interest. Contact your Part D plan to learn more about enrolling.
What to Do Now
The third-cycle negotiated prices will not take effect until January 1, 2028, so there is no immediate action required. However, here are some steps to stay informed:
- Review your current coverage. If you take any of the drugs listed above, note that negotiated prices from cycles 1 and 2 may already be lowering your costs in 2026 and 2027 respectively.
- Watch for announcements. CMS will publish the negotiated prices for cycle 3 drugs after the negotiation period closes in late 2026 or early 2027.
- Compare plans during open enrollment. When Medicare Open Enrollment comes around each fall (October 15 through December 7), compare plan options. Negotiated drug prices affect all Part D plans and Medicare Advantage plans with drug coverage, but other plan costs and formulary details still vary.
- Contact Medicare directly. For questions about how drug price negotiation affects your coverage, visit Medicare.gov or call 1-800-MEDICARE (1-800-633-4227), available 24 hours a day, 7 days a week.
The Bottom Line
The Medicare Drug Price Negotiation Program continues to expand. With 40 drugs now selected across three cycles and Part B drugs entering the program for the first time, the reach of the program is growing. Cycle 1 prices are already saving beneficiaries money in 2026, cycle 2 prices take effect in 2027, and the 15 drugs announced for cycle 3 will see negotiated prices starting January 1, 2028.
Combined with the $2,100 annual out-of-pocket cap, the $35 insulin cap, and other IRA provisions, these changes represent a meaningful shift in how Medicare prescription drug costs work. If you take high-cost medications covered by Medicare, the trajectory is toward lower out-of-pocket expenses and more predictable costs over the coming years.
For the most current information on the negotiation program, including the full list of selected drugs and published negotiated prices, visit the CMS Medicare Drug Price Negotiation Program page.