American seniors pay dramatically more for brand-name prescription drugs than patients in 19 comparable countries, and the gap keeps widening each year.
AARP published a new report examining 25 top-selling brand-name drugs that account for more than $100 billion in annual Medicare spending.
The findings arrive at a critical moment, with a federal subsidy program ending after 2026 that currently holds down premiums for standalone Medicare drug plans.
Together, the pricing data and the subsidy expiration create financial pressure on roughly 25 million Americans enrolled in Medicare Part D coverage.
The report strengthens the case for drug price negotiation, a policy that began producing results in 2026 with the first ten Medicare-negotiated medications.
For retirees and those approaching Medicare eligibility, understanding both the pricing landscape and the coming premium changes will shape enrollment decisions this fall.
Brand-name drug prices rose 81% in the U.S. while falling abroad
U.S. prices for the 25 brand-name drugs in the study climbed 81% on average after their initial market launch, AARP’s press release showed. Prices for the same medications fell 13% on average across 19 comparable countries during the same period after launch.
Enbrel, a widely prescribed treatment for rheumatoid arthritis, showed the most extreme divergence in the study’s findings across markets.
Its U.S. price increased 873% after launch while falling 27% internationally, creating a gap that costs Medicare beneficiaries billions each year.
Januvia, a common diabetes medication, rose 126% domestically while declining 40% in the comparison countries included in the analysis.
Bill Sweeney, AARP’s senior vice president of government affairs, said seniors already struggle with healthcare expenses despite hard-won drug pricing reforms.
Older Americans are already stretched thin by rising health care costs. AARP fought hard to create Medicare Part D, to win Medicare the power to negotiate drug prices and to cap out-of-pocket costs for people in Part D
Medicare could save nearly $200 billion over five years on its ten highest-cost brand-name drugs by requiring manufacturers to match their lowest international prices, the full AARP report found.
The 25 drugs in the study collectively affected nearly 15 million Medicare beneficiaries, concentrating the cost burden on some of the program’s most common conditions.
A separate AARP report published in February found that retail prices for brand-name drugs widely used by older Americans have increased faster than inflation nearly every year since 2004, the organization’s Rx Price Watch series showed.
AARP researcher Leigh Purvis said Medicare drug price negotiation “is successfully reducing costs for millions of seniors” but called for expanding the program’s scope.
A federal subsidy expiration will push Part D premiums higher in 2027
The Centers for Medicare and Medicaid Services announced it will end the Part D Premium Stabilization Demonstration after 2026, removing a $9.8 billion support program.
That program had subsidized standalone prescription drug plans to keep monthly premiums lower than market rates would otherwise allow, NPR reported.
The 2027 national average monthly bid amount will rise to $296.05, a 24% increase that reflects both drug cost growth and the subsidy removal.
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Standalone drug plan enrollees currently pay about $36 per month on average and could lose roughly $16 in monthly subsidies, a KFF analysis found.
Vice President and Director of the Program on Medicare Policy at KFF Juliette Cubanski noted that losing $16 on a $36 premium represents “a large proportional change” for affected beneficiaries.
CMS administrator Mehmet Oz said premiums “will go up by less than $10 for most Medicare recipients,” framing the increase as manageable for the majority.
Medicare Advantage plans with built-in drug coverage charge roughly $8 per month on average, making the gap between plan types more visible after the subsidy ends, Forbes contributor Jesse Pines reported.
Negotiated prices and new protections offer partial relief
Medicare began paying negotiated prices on ten high-cost drugs in January 2026, including Eliquis, Jardiance, and Entresto, the Medicare Rights Center confirmed.
Another 15 medications are set to receive negotiated rates starting in 2027, expanding the program’s reach across additional therapeutic categories, eMedicare’s tracking list showed.
The Trump administration separately announced most-favored-nation agreements with 17 drugmakers, projecting $529 billion in savings over a decade.
Seniors with standalone Part D plans should use the October 15 through December 7 open enrollment period to weigh their existing coverage against Medicare Advantage options that bundle drug benefits at lower average premiums, according to AARP.
Whether those agreements and the expanding negotiation program can offset the premium increases from the subsidy expiration remains an open question heading into 2027.
How the 2027 premium changes will land for beneficiaries
CMS will publish final plan-specific premiums in mid-to-late September, giving enrollees roughly two months before open enrollment closes on December 7.
Standalone Part D holders paying $36 today could see that figure jump by $16 or more once the subsidy disappears, while Medicare Advantage drug coverage averages $8.
AARP has told beneficiaries to compare standalone plans against Medicare Advantage alternatives during open enrollment, noting that coverage networks, provider access, and formulary differences carry as much weight as the premium number in the final calculation.
The negotiated prices rolling out in 2027 will lower costs on 15 additional drugs, though which savings reach specific prescriptions depends on plan-level decisions beneficiaries make during open enrollment.
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