Prescription Drug Prices Can Now Be Negotiated by Medicare
Thanks to the recently passed Build Back Better plan, prescription drug pricing will be lower for EVERYONE on Medicare. Regardless of your political affiliation, this is a big help to seniors, saving them a lot of money.
How will it work?
Next year, the government will pick 10 drugs and negotiate to obtain a lower price for them. In 2024, they will add another 12 drugs with 15 more in 2025. Within 5 years there will be approximately 80 medications on with reduced costs – a savings that directly benefits those on Medicare.
The prescription drug prices negotiated will not take effect until 2025, but this is great news for the long-term.
Which prescription drugs?
Medicare will negotiate prices for high-cost prescription drugs. This will include drugs seniors obtain at the pharmacy counter (through Medicare Part D), and drugs that are administered in a doctor’s office (through Medicare Part B).
For new drugs, there will be a 9-12 year period in which pricing cannot be negotiated as drugs become eligible for negotiation once they have been on the market for a fixed number of years: 9 years for small molecule drugs and 12 years for biologics.
The law also adds a price cap for Insulin at $35 per month.
Beyond pricing:
The new law imposes a tax penalty if drug companies increase their prices faster than inflation.
We will finally put an end to the days where drug companies could raise their prices with impunity!
The two big benefits:
- Directly lower out-of-pocket costs for seniors. Today, there is no cap on how much seniors and people with disabilities have to pay for drugs, and millions of seniors currently pay more than $6,000 a year in cost-sharing. This proposal puts an end to this burden, and ensures that seniors never pay more than $2,000 a year for their drugs under Medicare Part D.
- The plan will also lower insulin prices so that Americans with diabetes don’t pay more than $35 per month for their insulin.
This is a big win for everyone on Medicare.
Still have questions?
Reach out or give us a call!
Be well, be safe, and have a blessed day!
Brian Johnson, LUTCF