Medicare has for a long time been banned from negotiating drug prices in most instances, and that is a large part of the problem. They have a limited indirect ability by basically being able to contract with private healthcare plans to provide services, who in turn can negotiate, but it does in no way allow them to leverage their size to the full extent.

Compare to e.g. the UK where the NHS does not just negotiate on generics, but also use the considerable value of their contracts for generics or drugs that can easily be substituted to drive down prices on other drugs by bargaining on combined contract values.