64 More Drugs Cheaper for Medicare Enrollees
TL/DR –
Medicare enrollees will pay less for 64 drugs under Medicare Part B from January 1 through March 31 next year due to drug companies raising prices faster than the rate of inflation, according to the Department of Health and Human Services (HHS). These drugs are used by over 853,000 Medicare users annually for conditions such as cancer and osteoporosis. The Inflation Reduction Act also requires drug companies to pay rebates to Medicare when prices increase faster than the rate of inflation, with the Centers for Medicare and Medicaid Services planning to begin invoicing drug companies for these rebates by late 2025.
Medicare Enrollees to Pay Less for 64 Drugs Available Through Part B
The Department of Health and Human Services (HHS) announced that some Medicare enrollees will benefit from lower costs for 64 drugs under Medicare Part B, starting from January 1 through March 31 of the upcoming year. The reduced coinsurance rate results from drug companies increasing prices faster than the rate of inflation for these 64 drugs, which are used by over 853,000 Medicare beneficiaries annually to treat conditions like cancer, osteoporosis, and substance use disorder.
The drugs are part of a larger list of 120+ drugs included in the Inflation Reduction Act’s Medicare Prescription Drug Inflation Rebate Program.
Impact of the Inflation Reduction Act
Due to the Inflation Reduction Act, Medicare beneficiaries using these drugs could save between $1 and $10,818 per day in the first quarter of 2025, HHS estimates. For instance, cost savings of up to $12,728 could be realized by beneficiaries taking Atgam to treat aplastic anemia, based on their coverage and treatment plan.
From January 1, all Medicare Part D enrollees will also benefit from a $2,000 cap on yearly out-of-pocket prescription drug costs. HHS forecasts that this provision will result in substantial individual savings, with Part D enrollees predicted to save billions in out-of-pocket expenses.
Medicare Part D beneficiaries can also opt to spread their out-of-pocket prescription drug costs throughout the year, instead of paying all at once at the pharmacy, starting January 1.
Additionally, the Inflation Reduction Act mandates that drug companies pay rebates to Medicare when prices rise faster than inflation for specific drugs. The Centers for Medicare and Medicaid Services (CMS) plans to start invoicing prescription drug companies for Part B and Part D inflation rebates owed to Medicare by September 30, 2025, and December 31, 2025, respectively.
Rebates from drug companies will be deposited in the Federal Supplementary Medical Insurance Trust Fund, aiding in the long-term sustainability of the Medicare program, according to HHS.
The Larger Trend
Since April 1, 2023, the Medicare Prescription Drug Inflation Rebate Program under the Inflation Reduction Act has enabled Medicare beneficiaries to pay less for over 100 drugs. This is because their prices have escalated faster than inflation.
The inflation rebate has been applicable to certain Medicare Part B drugs since January 2023. HHS plans to invoice drug manufacturers for 2023 and 2024 Part B inflation rebates no later than the fall of 2025.
The Medicare Prescription Drug Inflation Rebate Program also permits the federal government to negotiate drug prices with manufacturers. In August, agreements for lower prices were attained for 10 drugs under the first round of the program. CMS estimates suggest that these lower prices could have saved Medicare an estimated $6 billion if implemented last year.
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