Medicare Prescription Drug Costs to Drop for 850,000 Americans in 2025
By Jake Beardslee ·
December 21, 2024
Starting in 2025, over 850,000 Medicare beneficiaries will see lower prescription drug costs due to the Inflation Reduction Act, according to a Friday announcement by the Department of Health and Human Services (HHS). The plan, administered through the Centers for Medicare & Medicaid Services (CMS), reduces coinsurance rates for 64 Medicare Part B-covered drugs treating serious conditions like cancer and osteoporosis. The White House / Wikimedia
Between January and March 2025, eligible Medicare users may save between $1 and $10,818 daily on specific treatments. For instance, a beneficiary taking Atgam for aplastic anemia could save up to $12,728 during this period. This initiative is part of the Medicare Prescription Drug Inflation Rebate Program, which requires drug manufacturers to issue rebates when prices outpace inflation. The resulting funds will bolster the Federal Supplementary Medical Insurance Trust Fund. Tima Miroshnichenko / Pexels
Additional provisions from the Inflation Reduction Act include capping annual out-of-pocket prescription costs for Medicare Part D enrollees at $2,000, beginning January 2025. Patients can also distribute payments monthly, providing greater financial predictability. Kaboompics.com / Pexels
The program aligns with public demand for action against escalating drug prices. AARP analysis highlighted that the list prices of 25 high-spending Medicare drugs have tripled since entering the market. Medicare will begin negotiating lower prices for certain drugs in 2026. Lance Reis / Pexels
HHS Secretary Xavier Becerra emphasized the importance of the law, stating in a press release, “By discouraging drug companies from raising their prices faster than inflation, we are keeping prices affordable for the people with Medicare who rely on these drugs to live healthier lives.” United States Department of Health and Human Services / Wikimedia
White House Domestic Policy Advisor Neera Tanden added in a press release, “Thanks to President Biden, companies that increase the price of prescription drugs faster than inflation must provide a rebate to Medicare. That means lower drug costs and more money back into the pockets of Americans with Medicare.” Gage Skidmore / Wikimedia
