If you’re on Medicare or planning to be soon, changes buried in the 2025 tax and budget reconciliation law mean higher costs are coming for several high-spending medications in 2026 — and the price tag could run into thousands of dollars.
According to a recent analysis by KFF (a nonprofit formerly known as the Kaiser Family Foundation), modifications to Medicare’s drug price negotiation program will delay or completely block cost-saving negotiations on nearly 20 expensive medications.
KFF researchers examined Medicare Part B and Part D spending data from the Centers for Medicare and Medicaid Services to identify which drugs would be affected and calculated the financial impact on both the government and patients.
An expansion of the “orphan drug exclusion” now protects more medications from Medicare’s price negotiation powers. An orphan drug is defined as a medication that’s intended to treat a condition affecting fewer than 200,000 people in the U.S. or that will not be profitable within seven years following FDA approval.
While the original Inflation Reduction Act of 2022 gave Medicare the authority to negotiate prices on certain high-cost drugs, the new law significantly weakens that ability for medications designated to treat rare diseases.
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The drugs affected and what they cost
The affected medications will now face delayed negotiations or complete exemption from price cuts. These medications represented $17.5 billion in combined Medicare and patient spending in 2023 — an 83% jump from 2019.
Here’s the list of medications, along with the conditions they treat and their combined Medicare and beneficiary spending amounts from 2023, the latest data available:
- Keytruda (cancer): $5.6 billion
- Darzalex/Darzalex Faspro (cancer): $2.4 billion
- Opdivo (cancer): $2.0 billion
- Jakafi (blood cancer): $1.9 billion
- Venclexta (cancer): $825.9 million
- Brukinsa (cancer): $801.4 million
- Ultomiris (rare blood disorder): $631.1 million
- Adempas (pulmonary hypertension): $598.2 million
- Reblozyl (anemia): $477.2 million
- Yervoy (cancer): $472.3 million
- Kesimpta Pen (multiple sclerosis): $413.1 million
- NPlate (low platelet count): $337.1 million
- Epidiolex (seizures): $197.4 million
- Adcetris (cancer): $196.5 million
- Tibsovo (cancer): $184.5 million
- Mekinist (cancer): $173.4 million
- Gazyva (cancer): $168.1 million
- Lumakras (cancer): $140.2 million
For individual patients, these spending figures can translate to staggering costs.
Keytruda, the most expensive on the list, cost about $12,600 per claim in 2023. With patients typically receiving six treatments annually, that’s around $76,100 per patient.
With the standard 20% Medicare Part B coinsurance, that means roughly $15,000 annually in out-of-pocket costs for patients enrolled in Original Medicare, aka traditional Medicare, without supplemental coverage.
What Medicare enrollees should do now
Review your supplemental coverage. If you have traditional Medicare without Medigap coverage, the 20% coinsurance on Part B drugs like Keytruda could mean roughly $15,000 annually. Medicare Advantage plans cap annual out-of-pocket costs at an average of $5,320 for in-network services in 2025.
Check if your medications are affected. If you’re taking any of these drugs, talk to your doctor about options and understand your potential costs now.
Know the Part D cap. For drugs covered under Part D like Jakafi, the 2026 out-of-pocket spending cap of $2,100 limits your exposure, and you can spread payments throughout the year.
The changes will cost the federal government an estimated $8.8 billion over the coming decade, eroding nearly 10% of the savings Medicare expected from its drug negotiation program. For some retirees, that means prolonged high costs for critical medications.
Brush up on your knowledge of Medicare in “8 Things Most People Don’t Know About Medicare.”
Thinking about enrolling in a Medicare Advantage plan? See what’s in store for these plans next year in “5 Ways Medicare Advantage Plans Are About to Change.”
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