Is Medicare drug-price negotiation working — or quietly undercutting the next generation of drugs?
Why it's live: 2026 is the first year negotiated prices actually hit pharmacy counters (10 Part D drugs), and CMS just set round-two prices for 15 more — discounts of 38% (Austedo) up to 84% (Janumet), projected at ~$12B/yr in Part D savings. With Florida seniors still reporting sticker shock at the register, both camps are pointing to the same data and drawing opposite conclusions.
For — it's working
The drugs in the crosshairs have been on the market for years and manufacturers long since recouped R&D, so negotiation captures savings that monopoly pricing was pocketing — that's the case the Center for American Progress makes, arguing the second round proves the Inflation Reduction Act is lowering costs and that the real threat now is administrative rollbacks that shrink the savings, not the negotiation itself.
Against — it backfires
The pharmaceutical industry (PhRMA and biopharma leaders, per the CRS review) counters that price-setting on established drugs blunts the incentive to invest in the next ones, and that manufacturers recoup the difference by raising prices on non-negotiated and commercial drugs — meaning some of the "savings" just move the cost onto younger, privately-insured patients rather than eliminating it.
Where it might land: round-two prices take effect in 2027, so the 2026 claims data — real adherence and out-of-pocket numbers for those first 10 drugs — will be the evidence both sides fight over next.