AARP: Most-Favored-Nation Pricing for Top Drugs Could Cut Medicare Spending Nearly $200 B

  AARP today called for strengthening Medicare's prescription drug price negotiation program after new analysis found doing so could reduce Medicare spending nearly $200 billion over five years while making lifesaving medications more affordable for millions of older Americans.

 

The analysis examined 10 high-cost brand-name drugs that have not yet been selected for Medicare drug price negotiation. Even though each of the 10 drugs were responsible for more than $2 billion in total Medicare spending in 2025, only one will be eligible to be selected for negotiation in 2027 because of exemptions in current law. Together, those drugs accounted for nearly $50 billion in Medicare spending in 2025 and were used by more than three million seniors. Utilizing Most-Favored-Nation (MFN) pricing for the 10 drugs would reduce total projected Medicare spending on the products from $273 billion to $76 billion between 2029 and 2033.

 

"One of the most striking findings is that only one of the 10 high-cost drugs we analyzed will be eligible for Medicare drug price negotiation next year, even though they all account for billions of dollars in Medicare spending," said Leigh Purvis, AARP Prescription Drug Principal and report author. "Our analysis shows there is significant opportunity to build on the program's early success by incorporating the prices paid in other high-income countries."

 

"For too long, big drug companies have charged Americans the highest prescription drug prices in the world, padding their profits while forcing too many older adults to skip or ration the medications they need because they simply can't afford them," said Nancy LeaMond, AARP Executive Vice President and Chief Advocacy & Engagement Officer. "AARP fought hard to give Medicare the authority to negotiate lower drug prices, and that historic reform is already proving that lower prices are possible. Policymakers should build on that progress so more Americans can afford the medications they need while taxpayers save billions more."

 

The analysis also found that applying Medicare-negotiated drug prices to the same 10 drugs would reduce total projected Medicare spending on the products from $273 billion to $155 billion between 2029 and 2033.

 

The findings reinforce AARP's longstanding support for Medicare drug price negotiation and demonstrate that strengthening the program could further lower prescription drug costs for older Americans while delivering billions in additional savings for taxpayers.

 

As part of its fight to lower health care costs, AARP also sent a letter to the Centers for Medicare & Medicaid Services (CMS) today urging the agency to take every available step to ensure Medicare beneficiaries continue to have access to affordable Part D prescription drug coverage. As millions of older Americans prepare to evaluate their 2027 drug plans, AARP called on CMS to prioritize stability, affordability, and access while continuing efforts to lower prescription drug costs for consumers.

 

The full report and total Medicare projected spending for the 10 drugs can be found here.

https://www.aarp.org/press/releases/2026-08-06-aarp-report-most-favored-nation-pricing-for-top-drugs-could-reduce-medicare-spending-by-nearly-200-billion-lower-drug-costs-further-for-older-adults/