Senate Democrats Outline Drug Pricing Agenda to Cut Patient Costs

Senate Democrats are advancing a new prescription drug pricing agenda they say would lower costs for patients, reduce wasteful health care spending, and strengthen US biomedical innovation, while sharply criticizing Republicans—and President Donald J. Trump in particular—for what they describe as failures to deliver meaningful drug price relief.1

Finance Committee leaders propose expanding Medicare negotiation, curbing middlemen, and reinvesting in biomedical innovation as part of a 2026 health care affordability strategy. | Image credit: Vitalii - stock.adobe.com

As 2026 begins, Democratic members of the Senate Finance Committee are signaling that prescription drug pricing will be a central pillar of their health policy strategy.1 In a letter to Senate colleagues, Finance Committee Ranking Member Ron Wyden (D, Oregon), joined by Sens Peter Welch (D, Vermont), Catherine Cortez Masto (D, Nevada), and Ruben Gallego (D, Arizona), outlined a framework aimed at lowering drug prices for patients while preserving incentives for innovation.

The letter frames rising health care costs as a systemic problem that prioritizes corporate profits over patient affordability, arguing that Americans are increasingly frustrated by high drug prices that place essential care out of reach. The senators emphasize that the Finance Committee minority staff will devote substantial effort this year to developing what they call the “next generation” of drug pricing policies.

Expanding Medicare Drug Price Negotiation

At the center of the proposal is Medicare’s authority to negotiate drug prices, a policy enacted in 2022 that allows the program to negotiate prices for a limited number of high-cost drugs. Democrats point to projected savings of $6 billion in the first year for the initial group of 10 negotiated drugs, with savings expected to reach $12 billion for the next tranche of 15 drugs.

The senators contrast these savings with what they describe as the lack of tangible results from Trump-era drug pricing initiatives. They cite recent manufacturer price increases, including for blockbuster cancer drugs, and argue that Republican-led policies have failed to produce sustained relief for patients at the pharmacy counter.

Despite pledges to stop the US from subsidizing global drug costs and Americans from paying far more than other nations for the same medicines, pharmaceutical companies raised prices on 948 brand-name drugs on January 1, 2026, including treatments for cancer, diabetes, asthma, chronic obstructive pulmonary disorder, and rare diseases—some by more than 100%, 200%, or even 1900%.2 Blockbuster drugs such as nivolumab (Opdivo; Bristol Myers Squibb), ravulizumab-cwvz (Ultomiris; AstraZeneca), and pembrolizumab (Keytruda; Merck & Co), which Republicans shielded from Medicare drug price negotiation, were among those affected.

Trump’s engagement with pharmaceutical executives yielded no enforceable commitments to lower costs, they say, while granting tariff exemptions that benefit drugmakers at taxpayers’ expense. With two-thirds of Americans reporting prescription drug costs as a financial burden, Democrats argue for expanding Medicare drug price negotiation to extend savings beyond seniors and criticize budget provisions that delay or exempt high-cost, life-saving medications from negotiation, effectively giving the pharmaceutical industry what the report calls a “blockbuster bailout.”

Building on Medicare negotiation, Finance Committee Democrats say they are developing policies to:

• Allow Medicare to negotiate a larger number of drugs more quickly
• End exemptions that shield certain high-revenue “blockbuster” drugs from negotiation
• Incorporate international reference pricing into the negotiation framework
• Extend drug price relief to people with employer-sponsored or individual market coverage

According to polling cited in the letter, Medicare drug price negotiation enjoys broad bipartisan support, including among Republican voters.

Tackling Out-of-Pocket Costs and the Drug Supply Chain

The letter also underscores a long-standing concern in managed care: lower list prices do not automatically translate into lower out-of-pocket costs for patients. Democrats highlight the role of intermediaries—such as insurers, pharmacy benefit managers (PBMs), and drug distributors—in absorbing a significant share of health care spending.

With total US health care spending estimated at more than $5 trillion annually, the senators argue that opaque pricing practices and margin-based incentives allow middlemen to profit when drug prices are high. As a result, patients and Medicare Part D beneficiaries may continue to face high cost sharing even when net prices decline.

To address these issues, Finance Committee staff plan to explore policies that would:

• Eliminate excessive markups on generic drugs
• Reduce supply chain practices that inflate costs
• Align patient cost sharing for branded drugs more closely with the actual net costs paid by plans and PBMs

The letter points to transparent pricing models, such as cost-plus approaches, as examples of how prescription drugs could be priced more directly and predictably for patients.

Reinvesting in Biomedical Innovation

In addition to affordability, Democrats emphasize that drug pricing reform must coexist with a strong innovation ecosystem. The senators warn that proposed cuts to the National Institutes of Health (NIH) and delays in FDA approvals could significantly slow drug development.

Citing Congressional Budget Office estimates, the letter notes that reductions in NIH funding and regulatory delays could result in dozens fewer new drug approvals and disrupt tens of thousands of patients enrolled in clinical trials. The authors argue that these effects would be particularly harmful for patients with cancer and rare diseases.

To counter these risks, Finance Committee Democrats say they are considering policies that would:

• Create new tax-based incentives for drug development and biomedical research
• Use the tax code to generate additional funding streams for federal research agencies, including NIH

They frame these proposals as a way to ensure that cost containment efforts do not come at the expense of future cures.

References

1. Common sense policies to lower drug prices for patients. United States Senate Committee on Finance. February 3, 2026. Accessed February 4, 2026.
2. Broken promises: Prescription drugs. United States Senate Committee on Finance. Accessed February 4, 2026.