The Medicare Part D Negotiations: A Tactical Analysis
The war on drug prices began with precision targeting. Ten high-value objectives.
Maximum impact. Minimum exposure. The kind of operation that looked simple on
paper but required years of legislative maneuvering, bureaucratic infighting, and political
will that most administrations lacked.
The Inflation Reduction Act of 2022 had given Medicare the weapon it needed:
negotiating authority. For decades, the pharmaceutical industry had operated with
impunity, setting prices at will, knowing that Medicare—by law—couldn’t push back.
That law had been written by politicians who took money from the same companies
whose products they were supposed to regulate. Classic capture theory. The fox
guarding the henhouse, except the fox had lobbyists and the henhouse was full of sick
old people who needed medicine to stay alive.
Now the tables had turned.
Target Acquisition
The first ten drugs were selected with surgical precision.
Eliquis, the blood thinner that prevented strokes and clots.
Jardiance, the diabetes drug that also protected kidneys and hearts.
Xarelto, another anticoagulant.
Januvia for blood sugar control.
Farxiga for heart failure.
Entresto, the heart medication that cardiologists prescribed when everything else
had failed.
Enbrel for rheumatoid arthritis.
Imbruvica for blood cancers.
Stelara for Crohn’s and inflammatory conditions.
And the insulin products NovoLog and Fiasp, delivered through pumps that kept diabetics alive around the clock.
Nine million Americans take these drugs. Collectively, they spend fifty billion dollars a
year. That was the kill zone—fifty billion in revenue that the pharmaceutical companies
had grown fat on, pricing strategy based on a simple calculation: what’;s your life worth?
How much will you pay to keep breathing?
The mathematics were brutal. A 2024 analysis showed that Medicare Part D
beneficiaries taking these drugs paid an average of $4,586 annually in out-of-pocket
costs. Some paid more. Much more. The system was designed to extract maximum
revenue from a captive market. You either paid or you died. Those were the options.
The Kill Shot
The new prices hit like suppressed rounds from a sniper rifle. Quiet. Precise.
Devastating.
Eliquis: fifty-one percent reduction. Price dropped from $521 to $254 for a thirty-
day supply. Annual savings for users: $436.
Januvia: seventy-nine percent reduction. The biggest kill of all. From $527 to
$113. Annual savings: nearly $4,000 for some patients.
Enbrel: sixty-eight percent reduction. The arthritis drug that cost $7,106 for a
months supply now ran $2,270. Still expensive as hell, but $4,836 in annual
savings made it survivable for people on fixed incomes.
Jardiance: sixty-six percent reduction.
Xarelto: sixty-two percent.
Entresto: fifty-three percent.
Farxiga: sixty-eight percent.
Imbruvica: thirty-eight percent—the smallest reduction, but still $3,000 back in
patients’ pockets annually.
Stelara: fifty-seven percent. The insulin products: savings varied, but the damage
to pharmaceutical profit margins were real and permanent.
Total projected savings to Medicare beneficiaries: $1.5 billion in the first year alone.
Money that would stay in the hands of people who needed it instead of flowing to
corporate earnings reports and executive compensation packages.
Force Multiplication
But the negotiation was only the opening salvo. The real strategic victory was structural.
The out-of-pocket cap: $2,100. That was the hard ceiling, effective January 1, 2026. You
could be on ten drugs, twenty drugs, the most expensive specialty medications in the
formulary—didn’;t matter. Once you hit $2,100 in a year, you paid nothing more. The
insurance covered everything after that.
For people with multiple chronic conditions—diabetes, heart disease, arthritis,
cancer—the cap is a game-changer. Previously, there had been catastrophic coverage,
but it still required five percent coinsurance with no limit. A patient on expensive
biologics could pay thousands every month, all year long, until the money ran out or
they died, whichever came first.
Now there is an endpoint. A knowable number. You can budget for it. You can plan. You
can survive.
The deductible is $615 for 2026. You pay that first, full freight. Then you enter the initial
coverage phase: twenty-five percent coinsurance on your drugs until you hit the cap.
The math works out favorably for most beneficiaries, especially those on the negotiated
Medications.
Insulin pricing is capped at $35 per month across all formulations and delivery methods.
The result of earlier legislative action, now baked into the system. Diabetics who’d been
rationing insulin—skipping doses, cutting pills, playing Russian roulette with their blood
sugar—can finally dose correctly. Emergency room visits from diabetic ketoacidosis will
decrease. Deaths will decrease. The insurance actuaries can calculate the exact
number of lives saved. They have formulas for that.
Phase Two
Fifteen more drugs selected for 2027 negotiations. The target list expands with precision.
Ozempic and Wegovy—the GLP-1 receptor agonists everyone was talking about,
used for diabetes and weight loss. Current price: around $1,000 monthly.
Negotiated price for Wegovy: $274. Seventy-two percent reduction. The kind of
savings that made the drugs accessible to the people who actually needed them
instead of just the wealthy who could afford concierge medicine.
Tradjenta: eighty-three percent reduction, from $419 to $70.
Janumet: seventy-two percent reduction.
Novolite: sixty-three percent.
Tresiba: sixty-one percent.
Otezla: fifty-eight percent.
Linzess: fifty-six percent.
Cosentyx and Breztri: both over fifty percent.
The pharmaceutical companies scream about innovation and research costs. They
always do. But the profit margins tell a different story. These are not companies barely
scraping by. These are some of the most profitable corporations in the world, with CEO
compensation packages that would fund small hospital systems.
Projected savings for 2027: between $6 billion and $12 billion, depending on uptake and
formulary changes. The range is wide because the actuaries are still modeling patient
behavior, but even the low end is substantial.
Sustained Operations
The negotiation cycle is now locked in. Twenty drugs for 2028. Twenty more for 2029.
The cycle continues indefinitely, with selection happening two years before
implementation to give manufacturers time to adjust and to give Medicare time to
ensure formulary coverage.
The strategic objective is clear: systematically reduce prices on the highest-spend
medications in Medicare Part D. Target the drugs with the biggest impact. Force the
manufacturers to negotiate or lose market access. Use the power of collective
bargaining to achieve what individual patients never could.
It isn’t a free market. It is a rigged game, and Medicare has finally learned to rig it in
favor of the people who paid into the system their entire working lives.
Ground Truth
In Pasadena, California, an elderly woman on four of the first ten negotiated drugs saw
her monthly medication costs drop by more than half. Her Part D premium: $34.50
monthly. Her deductible increased slightly, but her total annual spending decreased
substantially. She can now afford better food now. She can keep her apartment warmer
in winter. Small victories, but they compound.
In Palm Desert, Ca., a client of mine on Eliquis stopped cutting his pills. He’d been
doing it for months—splitting the tablets to make his prescription last twice as long,
knowing it was dangerous, knowing it compromised the medications effectiveness, but
unable to afford the alternative. The new price makes full dosing affordable. His risk of
stroke decreased to normal parameters. He will probably live years longer because of a
price reduction.
These are not abstractions. These are tactical victories with measurable outcomes.
Lives extended. Quality of life improved. Financial stress reduced. The kind of wins that
didn’t make headlines but changed everything for the people involved.
After Action Assessment
The Medicare Part D negotiation isn’t a perfect system. Premiums will increase year
over year. Deductibles will rise. Not every drug is covered. Not every patient benefits
equally. The pharmaceutical industry will adapt, will find new ways to extract profit, will
develop next-generation medications with patent protection and price them at levels that
make the current drugs look cheap.
But the negotiation establishes a new operational paradigm. The government can push
back. It can use its market power. It can force price reductions on drugs that had been
cash cows for decades.
Nine million people on the first ten drugs will save money in 2026. Millions more will
benefit as the negotiation expands. The cap protects everyone from catastrophic costs.
The insulin pricing saves diabetics from impossible choices.
It isn’t everything. But it is something. In the war on drug prices, we take our victories
where you find them.
Seniors can take their medications. Their hearts can beat steadily. Their blood can clot
properly. Their blood sugar can stabilize. Their cancer can stay in remission. They will
live longer, lived better, worry less about money and more about the things that actually
Matter.
James Mohr is the principal owner of Mohr Insurance Services and a 20-year veteran of investigating reporting for a variety of newspapers around the globe.