Medicare Prescription Drug Prices Keep Climbing, AARP Study Finds

25 medications show an average lifetime increase of 67 percent after hitting the market

Tony Pugh,

AARP

Comments

Published January 22, 2026

white medical pills arranged in an upward arrow shape on a yellow background, symbolizing rising pharmaceutical prices

Getty Images

Key takeaways

Most of the highest-priced drugs ineligible for bargaining.
2025 law expanded range of exemptions from deals.
Drug industry suits also have targeted original law.
Only the first round of cost-cutting moves is in effect.

List prices for 25 of the most expensive brand-name prescriptions for Medicare have increased by an average of 67 percent since they were first introduced, says a new report from the AARP Public Policy Institute.

Most of the costs have outpaced inflation, according to the report.

In 2023, Medicare spent $900 million or more for each of the 25 drugs in the study. That’s nearly $50 billion for medications used by more than 11 million beneficiaries.

“Higher Medicare spending driven by high and growing drug prices will affect all Americans in the form of higher taxes, cuts to this important program or both. Equally important, increasing drug costs — if left unchecked — will prompt more older Americans to stop taking necessary medications, thus leading to poorer health outcomes and higher health care costs in the future,” the report says.

Yet most of the 25 prescriptions in the report probably won’t be selected for Medicare’s third round of price negotiations this year, which would mean lower prices in 2028, the report says. Their expected omission is because of a “wide range of exemptions” on the types of drugs eligible for bargaining.

2022, 2025 laws limit the deals possible

Many of the exemptions are part of a 2022 law, strongly supported by AARP, that authorizes Medicare to negotiate for lower drug prices with pharmaceutical companies on costly and widely used medications. It also requires manufacturers to pay a rebate to Medicare if they raise their product prices by more than the general rate of inflation.

The pool of eligible medicines also shrank in 2025 because of the budget reconciliation bill signed in July that “expanded the existing exemption for orphan drugs that treat rare diseases,” the report says.

On average, the public must wait nine years after FDA approval before lower prices on drugs such as pills and tablets become available through Medicare negotiations, says Leigh Purvis, author of the report and prescription drug policy principal with the AARP Public Policy Institute. For biologics, made from living organisms or their components, the wait is 13 years.

Drug industry lawsuits have targeted 2022 law

AARP has opposed pharmaceutical manufacturer and congressional efforts to extend the time before prescription drugs can be selected for Medicare price negotiations, Purvis says.

“Ongoing efforts to modify the drug pricing-related provisions in the 2022 law must balance unproven claims of harm with the surety that such efforts will reduce much-needed savings for the Medicare program and the millions of Americans who rely on it,” the report says.

Since June 2023, a flurry of lawsuits from the drugmakers, most unsuccessful so far, have challenged the Medicare drug negotiation program on a number of constitutional and statutory issues. Generally, the challenges claim the program violates the First, Fifth, and Eighth amendments of the U.S. Constitution.

Medicare drug talks aim to lower prices

The first round of Medicare drug negotiations in 2024 resulted in lower prices for 10 medications that took effect Jan. 1, 2026. Part D enrollees are expected to save $1.5 billion in out-of-pocket costs this year.

The second round of negotiated prices on 15 additional drugs will take effect in 2027. About 5.3 million beneficiaries used these 15 drugs in 2024, accounting for $42.5 billion in Part D spending, the Centers for Medicare & Medicaid Services (CMS) reports.

The third round of negotiations on up to 15 more drugs will take place this year. The list of medications selected for negotiations must be released by Feb. 1. The list can include drugs covered under Part D through original Medicare and Medicare Advantage. And for the first time, the list can include drugs covered under Part B that are administered in doctors’ offices or outpatient care centers.

The agreed-upon prices must be released by Dec. 1, and the lower prices will take effect in 2028.

Join our fight to protect Medicare

AARP is working to keep Medicare strong. Here’s how you can help.

Sign up to become an AARP activist for the latest news and alerts on issues you care about.
Find out more about how we’re fighting for you in Congress and across the country.
See the latest AARP research on Medicare and more.
AARP is your fierce defender on the issues that matter to people 50-plus. Become a member or renew your membership today.

%{postComment}%

Tony Pugh is an award-winning writer and editor covering Medicare for AARP. He has also covered Medicare for Bloomberg Law and as a national correspondent for Knight Ridder/McClatchy Newspapers.