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Medicare Prescription Drug Prices Keep Climbing, AARP Study Finds
25 medications show an average lifetime increase of 67 percent after hitting the market
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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 report from the AARP Public Policy Institute.
Most of the costs have outpaced inflation, according to the report.
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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.
Six of the 25 medications were selected for the third round of Medicare drug price negotiations this year. That should provide lower prices in 2028.
But most of the other drugs aren’t likely to be a part of price talks because of a “wide range of exemptions” on the types of drugs eligible for bargaining, according to the AARP report.
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.
Video: Who Actually Saves Money From Medicare's Negotiated Drug Prices?
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.
The six drugs from the AARP study selected for Medicare price negotiation this year are Anoro Ellipta, Biktarvy, Cosentyx, Erleada, Orencia and Trulicity. Orencia’s price increase since its 2021 debut was 71 percent, tops in the AARP study. Lifetime changes for the other five drugs ranged from 55 percent since 2015 for Cosentyx and 29 percent since 2018 for Erleada.
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This story, originally published Jan. 22, 2026, was updated with a comparison to the list of 15 drugs that Medicare chose for price negotiations this year.
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