The inflation reduction act should mean less expensive drug costs for most senior U.S. citizens in the long run, but many benefits aren’t immediate.
Medicare will now be able to negotiate the cost of some drugs, according to the law. John Clark, a clinical associate professor at the University of Michigan College of Pharmacy, says that will eventually bring down out-of-pocket costs for seniors with Medicare Part D prescription drug plans. For some time, Medicare was unable to negotiate drug prices.
As part of the law – which goes to President Joe Biden after it passes the House of Representatives – the number of medications will be phased in beginning in 2026 with ten drugs. Beginning next year, drug companies will be required to return to patients all rebates when the cost of drugs rise faster than inflation, which they often do.
Furthermore, starting next year, vaccinations will be free for Part D recipients. The savings will not be passed along to seniors with private health insurance.
Part D catastrophic coverage will end in 2024 with 5% coinsurance. The plan is expected to assist approximately 3 million Americans.
Beginning in 2025, Medicare beneficiary out-of-pocket drug costs will be capped at $2,000 per year.
The Congressional Budget Office estimates that the reforms will save the government $288 billion over ten years.
Whether or not this new law will actually benefit patients is yet to be seen, Clark noted in a university news release, but this is the first measure against drug prices for Americans who pay more than people in other countries for the same drugs.
No cap on insulin prices for all Americans was included in the new law, and some view this as a victory for drug companies, according to Clark.
For more information:
Federal health insurance programs are described in more detail by the U.S. Centers for Medicare and Medicaid Services.
From the Source: University of Michigan, news release, Aug. 9, 2022