By Alex Moore
Medicare just punished drug companies for increasing the price of medicine faster than inflation. The Centers for Medicare and Medicaid Services (CMS) identified 64 drugs whose prices outpaced inflation in December and lowered their Part B coinsurance from January through the end of this month. The agency estimates that seniors will save up to $10,818 per day during this period, depending on the drugs they take and their course of treatment.
This is the third time that Medicare has implemented this policy. Known as the Prescription Drug Inflation Rebate Program, it’s one of several programs established by the Inflation Reduction Act of 2022 to lower prescription drug costs.
The law also includes another punishment for price gouging drug companies: If the prices for certain drugs rise faster than inflation, their producers must pay rebates to Medicare. The money from the rebates then goes into the Federal Supplementary Medical Insurance Trust Fund, which shores up Medicare’s finances. Medicare will send its first invoices for this component of the program—targeting drugmakers for outpacing inflation in 2023 and 2024—in Fall 2025.
These aren’t the only Inflation Reduction Act policies aimed at helping seniors, either. We’ve covered several of them before here at The Advisor, but they’re important enough to be worth mentioning again. A few highlights include:
- Medicare now has the power to negotiate drug prices with pharmaceutical companies. New prices for the first 10 drugs to undergo negotiations will take effect in 2026, with 15 additional drugs to follow each year (Ozempic and Wegovy are up for negotiation right now).
- The Medicare Part D out-of-pocket cap on prescription drug costs will decrease from $8,000 in 2024 to $2,000 in 2025. CMS expects this to save seniors billions of dollars in out-of-pocket drug costs.
- Medicare Part D enrollees will be able to spread their out-of-pocket prescription drug costs throughout the calendar year, which will make seniors’ pharmacy bills more predictable.
Altogether, while the law is likely to see intense scrutiny with a new administration in power, it includes many good policies for American seniors. Here at TSCL, we’ll be working hard to stand up for you and ensure—whatever happens with the rest of the law—that its policies benefiting seniors remain in place. We also encourage you to join us in speaking up by writing your congressional representative and senators to express your support for those policies. Please let us know your thoughts. Take our 2025 Senior Survey here.
