IRA Drug Negotiation: Improved Medicare Part D Coverage in 2026 & 2027
- The Medicare Drug Price Negotiation Program, established through the Inflation Reduction Act of 2022 (IRA), is already demonstrating a benefit beyond simply lowering prescription drug costs for Medicare...
- The IRA mandates that all Medicare Part D plans cover drugs selected for price negotiation, in all available dosages and forms, once the negotiated prices take effect.
- As of January 1, 2026, all Part D enrollees now have coverage for all ten drugs with negotiated prices, encompassing all dosage forms and strengths.
The Medicare Drug Price Negotiation Program, established through the Inflation Reduction Act of 2022 (IRA), is already demonstrating a benefit beyond simply lowering prescription drug costs for Medicare beneficiaries. A recent analysis reveals that the program is also improving access to those same drugs, ensuring broader coverage within Medicare Part D plans.
The IRA mandates that all Medicare Part D plans cover drugs selected for price negotiation, in all available dosages and forms, once the negotiated prices take effect. This requirement, designed to maximize the impact of lower prices, is showing positive results. An analysis of 2026 Medicare Part D formularies, examining coverage of the first ten drugs subject to negotiation, indicates improved coverage rates compared to 2025, before the IRA’s stipulations were in place.
As of , all Part D enrollees now have coverage for all ten drugs with negotiated prices, encompassing all dosage forms and strengths. The improvements are particularly noticeable for specific medications. Coverage for the insulin products Fiasp and NovoLog has expanded, as has access to certain dosages of Imbruvica, a cancer drug. In 2025, Fiasp was covered by 24% of Part D plans, while NovoLog was covered by 32%. Two dosages of Imbruvica were covered by roughly half of plans.
The impact isn’t limited to the initial ten drugs. The IRA also selected a second set of fifteen drugs for negotiation, with those prices slated to take effect in 2027. Preliminary data suggests that the coverage requirement will also improve access to several of these drugs, including Wegovy, a GLP-1 receptor agonist used for obesity and cardiovascular disease risk reduction.
Currently, Wegovy is covered by a limited number of Part D plans, enrolling less than 1% of Part D beneficiaries in . This limited coverage is due to a Medicare policy that historically prohibited coverage for drugs used solely for weight loss. However, a new temporary, voluntary model is being launched by the Trump administration to expand Medicare coverage of GLP-1s for obesity treatment, beginning in , potentially opening access to a wider range of patients.
The IRA’s coverage requirement will increase the proportion of Part D enrollees with access to Wegovy for Medicare-covered uses starting in . This effect will extend to six other drugs selected for negotiation in the second round: Austedo and Austedo XR (treatments for involuntary movement disorders), Otezla (for psoriasis and psoriatic arthritis), and Breo Ellipta (for asthma and COPD). Coverage rates for these drugs currently range from 51% to 72% across Part D plans.
It’s important to note that several drugs already enjoy widespread coverage within Part D, falling into what are known as “protected classes.” These include Xtandi, Pomalyst, Ofev, Ibrance, and Calquence (antineoplastics used in cancer treatment), as well as Vraylar (an antipsychotic). All Part D plans are required to cover drugs within these protected classes, ensuring consistent access for beneficiaries.
The Medicare Drug Price Negotiation Program represents a significant shift in how prescription drug costs are managed within Medicare. Beyond the anticipated cost savings – estimated at $1.5 billion in annual out-of-pocket expenses for beneficiaries and $6 billion per year for the Medicare program overall – the program is demonstrably improving access to essential medications. This dual benefit underscores the potential of the IRA to address both affordability and accessibility challenges within the Medicare system.
The first set of negotiated drug prices includes medications treating a range of serious chronic conditions, including cancer, diabetes, blood clots, heart failure, autoimmune diseases, and chronic kidney disease. In , Part D spent approximately $46.4 billion on these ten drugs alone, representing 19% of total Part D spending. Beneficiaries paid $3.4 billion out-of-pocket for these medications during the same period.
The negotiation timeline is unfolding as follows: saw the announcement of the first ten drugs selected for negotiation; brought the publication of the negotiated prices; and marks the implementation of those prices. Medicare is currently negotiating prices for an additional fifteen drugs, with those prices expected to take effect in .