At the start of 2026, pharmaceutical companies raised prices on 872 brand-name drugs. At the same time, Medicare was in the middle of its first year of actually negotiating those prices down. Congress watched both things happen, then passed a law making it harder to negotiate the most profitable drugs of all. That is the state of American drug pricing in 2026.
What Negotiation Actually Accomplished
The Medicare drug price negotiation program, created by the Inflation Reduction Act, produced real results in its first year. The Centers for Medicare and Medicaid Services negotiated prices on 10 high-cost drugs, with reductions ranging from 38 to 79 percent below the previous prices. CMS estimated the program saved Medicare approximately $6 billion in 2026 alone.
The drugs on the initial negotiation list include some of the most widely used medications in the country: blood thinners, diabetes medications, and heart drugs that millions of seniors depend on. For those patients, the negotiated prices represent real savings at the pharmacy counter.
"When the negotiated prices go into effect in 2026, people with Medicare will see lower out-of-pocket costs for these drugs. That is the purpose of the program, and that is what is happening." — CMS Fact Sheet, 2025
The program was designed to expand over time. Under the original IRA timeline, Medicare would negotiate prices on 15 more drugs in the next cycle, then 20 more, building toward a significantly broader coverage of high-cost medications.
The Industry's Two-Track Response
Pharmaceutical companies responded to the negotiation program in two ways simultaneously. In public, they filed lawsuits challenging the constitutionality of mandatory negotiation. In practice, they raised prices on 872 brand-name drugs in January 2026, before the negotiated prices fully took effect.
The Campaign for Sustainable Rx Pricing tracked those increases and found they outpaced the start of 2025. Price hikes averaged around 5 to 6 percent across the affected drugs. Many of those drugs are used by the same Medicare beneficiaries the negotiation program was designed to help.
The price hikes and the negotiations were happening at the same time, in parallel, on different sets of drugs. The 10 drugs being negotiated were getting cheaper. The 872 drugs not being negotiated were getting more expensive. The net effect depended entirely on which drugs a given patient was taking.
The Big Beautiful Bill's Quiet Giveaway
Buried inside the Big Beautiful Bill passed by Congress in 2025 is a provision that exempts certain high-revenue drugs from the Medicare negotiation program. Specifically, the bill shields drugs that generate more than a certain revenue threshold, effectively protecting the pharmaceutical industry's most profitable products from price negotiation.
The Center for American Progress analyzed the provision and estimated it would shield roughly $40 billion per year in drug revenue from negotiation. The fiscal cost to Medicare, in savings that will not materialize, is estimated at approximately $9 billion over the relevant budget window.
The provision was not heavily debated. It did not receive significant floor time. It moved through as part of a broader reconciliation package. Pharmaceutical industry lobbying expenditures in the period leading up to the bill's passage exceeded $200 million, more than any other industry sector.
The Lesson Here Is About Market Design
Drug pricing in the United States is not a market in any conventional sense. Prices are set by manufacturers with no effective competition on branded drugs under patent. Insurers and pharmacy benefit managers negotiate rebates that lower what they pay, but those savings do not reliably flow to patients. The federal government, until the IRA, was legally prohibited from negotiating at all.
The negotiation program demonstrated that negotiation works. A 38 to 79 percent reduction is not a rounding error. It is the difference between a drug being affordable and being unaffordable for patients on fixed incomes. The program's first year proved the mechanism.
The Big Beautiful Bill's exemption provision does not eliminate the program. It carves out the drugs where negotiation would save the most money, protects the most profitable products from any price pressure, and leaves the program intact for drugs where the savings would be smaller. That is not a compromise. It is a targeted extraction of the program's highest-value components.
Medicare beneficiaries will pay more for drugs that could have been negotiated. That money will go to pharmaceutical company shareholders. Congress voted for that outcome. Voters should know who voted for it.
Sources
- Centers for Medicare and Medicaid Services: Medicare Drug Price Negotiation Program Negotiated Prices 2026
- NPR: Many Brand-Name Drug Prices Are Going Up, Despite Trump Administration Deals
- Campaign for Sustainable Rx Pricing: Big Pharma Rings In 2026 With More Than 300 Price Increases
- Center for American Progress: Medicare Negotiation Is Working
Independent. Unfiltered. Unbought.
This is independent, sourced accountability reporting by Impeach 47. No corporate owners, no paywall.
Get new posts delivered free by email: impeachh47.substack.com.
Follow on X: @Impeach_47.
Follow on Threads: @impeach.47.
Follow on Instagram: @impeach.47.
Subscribe on YouTube: @impeach_47.
If this reporting is useful, the way you support us is simple: wear the movement. Every hat, shirt, and sticker from impeachtrump.earth is a walking billboard and the thing that keeps this research fed.
