The Inflation Reduction Act of 2022 authorized Medicare to negotiate prices for a small number of high-cost drugs starting in 2026, capped Part D out-of-pocket costs at $2,000/year, and capped insulin at $35/month for Medicare beneficiaries. The first 10 negotiated drug prices took effect in 2026; the program expands annually.
Pharmaceutical companies have challenged the program in court, arguing the "negotiation" is effectively price-setting. Lower courts have largely upheld the program.
Defenders argue Medicare's buying power should be deployed against manufacturer monopolies that result from patent and FDA exclusivity. Critics argue government price-setting reduces incentives for new-drug R&D.