Medicare will Have Power to Negotiate Lower Drug Costs for Seniors, & Insulin Savings Begin Next Year, in “Rare Defeat for Big Pharma”
WASHINGTON, DC – U.S. Senator Sherrod Brown (D-OH), long a leader in efforts to lower prescription drug prices, is alerting Ohio seniors to benefits the groundbreaking Inflation Reduction Act of 2022, which will save Ohioans on Medicare at the pharmacy counter, in what one news organization called “a rare defeat for Big Pharma.” Nearly 2 million Ohio seniors are enrolled in Medicare part D coverage and will benefit from new law to reduce drug price inflation.
“We know Ohioans are struggling with high prices right now, and prescription drugs are some of the most overpriced goods many families are forced to pay for each month. After years of fighting opposition from Big Pharma, and the politicians who always do their lobbyists’ bidding, we are finally making progress to bring down drug prices for seniors,” said Brown. “The Inflation Reduction Act finally takes on the drug companies to lower drug prices, particularly for Americans on Medicare.”
For years, Brown has led efforts to allow Medicare to negotiate directly with pharmaceutical companies and to lower drug prices for all Americans. Now the Inflation Reduction Act will:
- Beginning next year, cap insulin costs at $35 per month for all Americans on Medicare.
- According to the Centers for Medicare and Medicaid Services, one in three Medicare beneficiaries have diabetes, and more than 3 million use insulin.
- Insulin costs have spiked dramatically in recent years, despite no changes to the actual drugs. One pharmaceutical company raised the price of a commonly-prescribed form of insulin by 1,000% over from 1999 to 2019. The Inflation Reduction Act will cap monthly insulin costs for Medicare beneficiaries at $35.
- Allow Medicare to directly negotiate to lower the cost of prescription drugs to ensure older Americans get the best-possible deal on high-cost drugs. The Department of Health and Human Services would start price negotiations next year for 10 expensive and popular drugs, which would increase to 20 drugs over time. The new negotiated prices are expected to begin taking effect in 2026.
- Implement a $2,000 cap on out-of-pocket drug costs for seniors, by 2025. Currently, there is no cap on out-of-pocket spending for drug costs in Medicare. This provision also allows seniors to break out the cap by month to spread costs throughout the year, instead of facing them all up front at the start of the year.
- 1.4 million Medicare beneficiaries have out-of-pocket costs of $2,000 or more.
- In 2019, there were 154 drugs that cost Medicare Part D beneficiaries more than $2,000 in average annual out-of-pocket costs for that one drug alone. That includes 108 drugs where seniors’ average annual out-of-pocket costs surpassed $3,100.
- Establish an “inflation rebate” that requires drug companies to pay a rebate to Medicare when they increase the price of their drugs beyond the pace of inflation, to help reduce year-after-year unjustified price increases and limit the astronomical growth in prices for drugs that have been on the market for years.