TL/DR –
The AARP Public Policy Institute’s report found that list prices for 25 top Medicare Part D drugs have increased by an average of 98%. The report also revealed that these non-covered prescriptions cost their 7 million users almost $50 billion in 2022. The Inflation Reduction Act of 2022, which includes a provision allowing Medicare to negotiate the prices of certain high-cost prescription drugs, is seen as a crucial measure to combat these high costs, with the first negotiated prices expected to go into effect in 2026.
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Medicare Part D Drugs’ List Prices Soar by an Average of 98%
A recent spotlight report from the AARP Public Policy Institute reveals that the list prices for the top 25 drugs under Medicare Part D, which are currently not featured in Medicare’s drug price negotiations, have seen an average price hike of 98%.
Price Hikes Based on ‘Change of Life’
Emergency physician Greg Mears observes that pharmaceutical companies no longer price their drugs based on the cost of developing them. Instead, the pricing is based on ‘change of life’ or the cost in years per life saved on benefits. This new approach has contributed to the escalating costs of prescriptions.
Medicare Part D Under AARP’s Watchful Eye
The AARP has been closely tracking the surge in drug costs, especially within the Medicare Part D purview. Leigh Purvis, AARP Prescription Drug Policy’s representative, expresses serious concerns about the inflated prices.
Purvis explains that the situation has become dire for some people, who are now forced to make difficult choices between essential items like food or rent and the prescription drugs they need.
Costs for Uncovered Prescriptions Skyrocket
The report also reveals that the 25 highest-costing drugs, which are not covered by Medicare, cost their 7 million users almost $50 billion in 2022.
The Role of the Inflation Reduction Act of 2022
Purvis believes that the Inflation Reduction Act of 2022 is crucial in the current context. The Act contains a clause specifically designed to tackle high prescription costs.
New Provision Allows for Negotiation
The Act introduces a provision that permits Medicare to negotiate the prices of certain high-priced prescription drugs. Ten drugs have already been chosen for negotiation, with more expected to be added each year.
Purvis shares that she has heard numerous stories from people struggling to afford their prescription drugs and believes that no one should be put in such a difficult position. She adds that once the law is implemented, the first set of negotiated prices will take effect in 2026.
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