Medicare’s second round of drug price negotiations is now locked in, and the timeline is easy to blur with a newer, separate round that just started. The federal government finished bargaining with manufacturers over 15 widely prescribed drugs months ago, and those negotiated prices take effect for Medicare Part D and Part B plans on January 1. Meanwhile, a third round covering a different set of 15 drugs — including, for the first time, medicines billed under Part B — is only now moving through negotiations for a 2028 start. For a household tracking a parent’s or spouse’s prescription costs, mixing the two up is an easy mistake, and the difference matters for what to expect next year versus two years out.
Two Rounds, Two Different January Firsts
The dates belong to separate negotiation cycles. Medicare’s second cycle of drug price negotiations concluded when the government and manufacturers reached agreement on all 15 selected drugs, and those negotiated prices take effect January 1, 2027 — the “15 more drugs” in the headline. If those prices had applied in 2024, they would have saved an estimated $8.5 billion in net covered drug spending, roughly 36% less in aggregate.
A third cycle, announced by CMS in late January, is a different batch entirely: Anoro Ellipta, Biktarvy, Botox and Botox Cosmetic, Cimzia, Cosentyx, Entyvio, Erleada, Kisqali, Lenvima, Orencia, Rexulti, Trulicity, Verzenio, Xeljanz and Xeljanz XR, and Xolair, plus Tradjenta selected for the program’s first-ever renegotiation. Manufacturers had until February 28 to decide whether to participate. Negotiations for this group run through 2026, with any resulting prices — again, a separate January 1 — landing in 2028, not next year.
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What a “Maximum Fair Price” Actually Caps
The number CMS negotiates is called a maximum fair price, and it is a ceiling on what Medicare and its plans pay for the drug — not a copay set at the pharmacy counter. The Negotiation Program’s own description frames it as a plan-level price control built into the Part D and Part B payment system, not a consumer discount card. A lower maximum fair price reduces what a plan and the government spend on that drug in aggregate, which can ease pressure on premiums or formulary placement over time. But it does not, by itself, determine the dollar amount printed on a specific enrollee’s receipt that month.
That distinction matters because a household’s actual bill runs through a different mechanism: the enrollee’s own Part D benefit design, which has nothing to do with whether a given drug’s manufacturer just finished negotiating with CMS.
The Out-of-Pocket Cap Is the Real Household Protection
For calendar year 2026, CMS’s Part D benefit redesign guidance sets the annual deductible at $615, after which an enrollee pays 25% coinsurance on covered drugs until total out-of-pocket spending hits an annual threshold of $2,100. Past that point, the enrollee owes nothing more for covered Part D drugs for the rest of the year. That cap — not the negotiated price of any single drug — is what actually limits what a household pays out of pocket over a full year.
In practice, a retiree taking one of the newly negotiated drugs may see a lower monthly cost if their plan passes savings through in coinsurance, but the larger protection against a catastrophic drug year is the $2,100 cap itself, which applies regardless of which drugs happen to be on the negotiated list.
The First Part B Drugs Ever Negotiated
The third cycle breaks new ground by reaching into Part B — drugs typically administered in a doctor’s office or infusion center, such as Botox and several cancer and autoimmune treatments — rather than the retail pharmacy drugs Part D usually covers. Between November 2024 and October 2025, roughly 1.8 million people with Medicare Part D or Part B coverage used the drugs on the third cycle’s selected list to treat conditions including cancer, psoriatic arthritis and HIV, accounting for about $27 billion in combined Part B and Part D spending — roughly 6% of total program spending in that window.
CMS also published a broader ranking of the 50 top negotiation-eligible drugs based on combined Part B and D expenditures, describing the third cycle’s 15 selections as the highest-spending drugs on that list.
What Changes for a Household on January 1
For anyone tracking cycle 2, the practical change arriving January 1, 2027, is a lower price paid by Medicare and its plans on 15 specific drugs — not an automatic personal discount. The size of any household’s actual savings still runs through their plan’s coinsurance structure and where they sit relative to the $2,100 out-of-pocket threshold that year. CMS Administrator Dr. Mehmet Oz described the broader negotiation effort as an attempt to “target the most expensive drugs in Medicare, negotiate fair prices, and make sure the system works for patients,” a framing that applies to both the cycle already finished and the one now underway for 2028.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources; where a claim could not be verified from the public record, we say so.
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