Last week President Biden signed the Inflation Reduction Act into law. That is the legislation that contains the provisions that will allow Medicare to negotiate drug prices with the big drug companies and eventually lower prescription drug prices.
In case you missed it in last week’s update, here are the important measures in the bill that will help TSCL supporters, and all seniors in Medicare in the coming years. The provisions of the legislation will kick in over a period of years and we have listed them below in the order in which they will become effective.
Starting next year vaccines will be available with no co-pay or deductible under Medicare Part D.
The measure will exclude insulin products covered under Medicare Part D from applying to Medicare patient deductibles under the program, starting next year. It will also cap insulin copayments for Medicare patients to $35 a month for plan years 2023 through 2025 regardless of whether an individual has reached the initial coverage limit or out-of-pocket threshold. Medicare patients would also receive reimbursement for any excess cost-sharing or copayments made in the first three months of 2023.
It will expand Medicare Part D premium subsidies for low-income seniors to those between 135% and 150% of the poverty line starting Jan. 1, 2024.
The measure will also cap the out-of-pocket cost of prescription drugs under Medicare Part D for beneficiaries at $2,000 a year starting in 2025.
It will direct the Health and Human Services Department to establish a “Drug Price Negotiation Program” to negotiate a maximum price of high-cost prescription drugs beginning in 2026 for Medicare Part B, which covers medicines administered in a medical setting, and Part D, the program’s prescription drug benefit.
It will also require the Department of Health and Human Services (HHS) to identify 100 drugs without competition that have been on the market for seven years and biologics that have been on the market for 11 years, and that have the highest spending under Medicare.
HHS would select 10 drugs from that list — or the maximum number eligible for negotiation that year if less than that — for negotiation in 2026 increasing to 20 drugs by 2029.