Are you among the roughly 50 million seniors with a Medicare Part D prescription drug plan? You may end up paying less for certain medications come 2026 – and beyond.
Negotiating Prescription Drug Costs
The cost of brand-name prescription medications has increased steadily over time. As a result, many older adults have trouble affording the drugs on which they rely. Some even resort to skipping their dosages to save money. In fact, 82 percent of U.S. adults describe the cost for their prescription medications as “unreasonable.”
In late 2022, Congress passed the Inflation Reduction Act in an effort to address this problem over the coming years. Provisions in this legislation include allowing lawmakers to begin negotiations on prices for certain high-cost prescription drugs as early as 2024.
Most recently, the federal government announced 10 medications, currently used by about 9 million people enrolled in Medicare nationwide, that will undergo the first phase of pricing negotiations:
Negotiations on prices for these prescription drugs, which include blood thinners and treatments for people with Type 2 diabetes, will take place between October 2023 and August 2024.
“Our goal with these negotiations is to improve access to some of the costliest drugs for millions of people with Medicare while driving competition and innovation,” Chiquita Brooks-LaSure, administrator of the Centers for Medicare and Medicaid Services, said in a news release.
Those For and Against Drug Pricing Reform
The drug pricing law does not come without significant controversy. Large pharmaceutical companies have in fact filed numerous lawsuits in opposition to the legislation. They claim that the negotiations will drive down their revenue and profits, while limiting their capacity to develop as many new medications.
Meanwhile, lawmakers behind the bill say that price cuts for prescription drugs will reap a range of benefits. For one, they tout the process as a way to make health care for older Americans more affordable. Estimates outline annual savings of $25 billion with lower drug pricing. Proponents also assert that the drug pricing regulations will ultimately save taxpayers money and reduce the federal deficit by billions of dollars, all while improving consumers’ well-being.
What Discounting Pricing Will Mean for Medicare Patients Going Forward
For the first 10 prescription medications headed into the negotiation process, discounted prices are set to become effective in 2026. By 2029, it’s expected that patients will be paying less for up to 60 different drugs covered by Medicare. Several other cost-saving measures are included in the legislation. For example, earlier this year Medicare patients saw the cost of their prescription insulin drop to $35 a month.
The Act will also limit how much Part D enrollees spend out of pocket for their prescriptions to $2,000 a year. According to a White House news release, this measure alone will save each of the nearly 2 million people who are now paying the most for their medications an average of $2,500 a year.
Learn more about the steps in the timeline for the government’s pricing negotiation process. For more information on the Medicare program, be sure to check out the following articles: