Turning the Tide on High Drug Costs

How AARP’s advocacy is delivering real savings

Nancy LeaMond,

AARP

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Published December 23, 2025

a dollar sign made of pills in front of the capitol dome

AARP (Getty Images 2)

For years, millions of older Americans have lived with constant anxiety about the cost of the medications they need to stay healthy. Folks across the country have faced impossible choices between filling a prescription or paying for everyday essentials like groceries and gas. These are tough financial decisions that also affect people’s health, independence and quality of life.

This reality is beginning to change. Thanks to persistent advocacy by AARP, older Americans now see historic reforms that are already saving them money and will continue to do so in the years ahead.

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A major turning point came in 2022, when Congress passed legislation that included landmark prescription drug pricing reforms. This was the result of years of advocacy and gave Medicare something it had never had before: the power to negotiate lower drug prices for older Americans. For decades, drug companies fought hard to block this reform, spending millions on lobbying and advertising to maintain the status quo. But AARP refused to back down. We launched a full-scale campaign to mobilize our members and volunteers, tell the stories of real people struggling with high prices, and make sure lawmakers understood what was at stake. The result was a law that delivered both immediate and long-term relief for millions of Americans.

Relief began quickly. In 2023, Medicare beneficiaries began receiving free vaccines, including shingles and flu shots, and insulin costs were capped at $35 per month. For many, this change meant hundreds of dollars in annual savings and the ability to stick to their treatment plans without worrying about the next bill.

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At the same time, new protections ensured drug companies that increased the prices of some of their products faster than inflation had to pay the higher-than-inflation amount back to the government. For example, if inflation is 5 percent, and a drug price increased by 6 percent, the drug company would have to pay the 1 percent difference for all Medicare sales of that drug back to the government. These reforms didn’t just help individuals — they marked a new era of accountability in drug pricing.

Prescription savings in 2026

The momentum carried into 2025 with another significant change: an annual cap on out-of-pocket costs for Medicare Part D beneficiaries. This is a big deal for anyone who has faced unpredictable and overwhelming medication costs. Instead of worrying about bills that could climb into the thousands or even tens of thousands of dollars, people with prescription drug coverage now have more certainty in what they will have to pay each year. That cap started at $2,000 and will adjust for inflation to $2,100 in 2026.

With the new year quickly approaching, more transformative changes are right around the corner. In 2026, the first round of Medicare-negotiated drug prices will debut, targeting 10 of the most expensive and widely used medications. These prescriptions are used to treat some of the most common and serious conditions among older adults, including diabetes, heart diseases, blood clots, arthritis and cancer — conditions that affect millions of Medicare beneficiaries every day. This is a game-changer for the folks who rely on these medications and for the system as a whole. It is expected to lower enrollees’ out-of-pocket spending by an estimated $1.5 billion in 2026. And an analysis from the Centers for Medicare & Medicaid Services found that Medicare would have saved $6 billion if the prices that CMS negotiated for these 10 drugs had been in effect in 2023.

In 2027, a second round of negotiated prices will roll out, expanding savings even further. Each year more drugs will be added to the list, gradually reshaping the market and putting pressure on drug companies to keep prices reasonable. For consumers, this means more affordable access to life-saving treatments. For Medicare, it means sustainability and fairness.

These federal reforms are only part of the story. They represent the foundation of AARP’s broader fight to make prescription drugs affordable, but our advocacy goes far beyond Washington. In fact, over the past five years, we secured more than 100 victories in state capitols across the country — legislation that tackled everything from price gouging to expanding access to lower-cost generic medications and pulling back the curtain on drug pricing to deliver transparency.

We often talk about issues in terms of policy and data. But beyond the numbers, this is about real people — parents, grandparents, friends and neighbors — who will finally see relief from the high drug costs and the fear that the price of needed medications will spiral out of control.

It’s worth remembering how far we’ve come. Just a few years ago, the idea of Medicare negotiating drug prices seemed out of reach. Powerful interests argued it would stifle innovation or harm patients, but advocates knew the truth: High prices were harming Americans every day. By sharing stories, organizing grassroots campaigns and keeping the pressure on lawmakers, AARP and our allies changed the conversation.

The fight for fair drug prices is paying off. But we know our work is far from over. AARP will continue to monitor implementation, push for transparency and ensure that savings reach the people who rely on these medications every day. These changes mark a meaningful step toward a health care system that works better for older Americans — one that puts affordability, accountability and people first.

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