Rx Drug Law Saves Some Cancer Patients More Than $7,000 in 2024

New out-of-pocket spending limit results in real savings for people taking oral chemotherapies

Rachel Nania,

AARP

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En español

Published September 17, 2024

a pill capsule opening and coins pouring out

Photo Collage: AARP (Source: Adobe Stock (2))

Many people who are taking oral chemotherapy drugs to help treat their cancer are saving thousands of dollars this year on their medication, new research shows.

In 2023, people with a Medicare prescription drug plan paid, on average, more than $11,000 in out-of-pocket expenses for certain chemotherapy pills that can be taken at home. But thanks to the new prescription drug law that limits out-of-pocket costs at the pharmacy counter for people with a Part D plan, patients are saving a median of $7,260 on these medications in 2024, according to a study published in the journal JAMA Network Open — and the savings are expected to grow in 2025.

Spending limits ease cancer’s financial burden

In the last decade, oral chemotherapies have become “really common for cancer care,” says lead study author Benjamin Pockros, M.D., but they have also become “particularly very expensive.” The retail price for some of these medications hovers around $15,000 for a 30-day supply. “And oftentimes these treatments go on for multiple years, so you can only imagine the cost burden for patients,” adds Pockros, a urology resident at Michigan Medicine.

For the study, Pockros and a team of researchers from the University of Michigan used the Medicare Part D Plan Finder tool to estimate how much beneficiaries were paying for some of the most common oral chemotherapy drugs, including those prescribed to treat prostate cancer, breast cancer, leukemia and more.

In 2023 — before the Medicare Part D changes in the 2022 law started to take effect — annual out-of-pocket costs for these oral cancer medications averaged $11,284 for people with a Medicare prescription drug plan. Once the new spending limit was implemented in 2024, annual out-of-pocket expenses dropped to an estimated $3,927.

“It’s a difference of almost $7,000 just because of this policy implementation,” Pockros says. These savings “will likely continue to grow” as the out-of-pocket cap decreases from about $3,500 in 2024 to $2,000 in 2025, the study’s authors write.

Research shows that high drug costs have harms beyond financial strain. Paying more out of pocket for prescriptions is associated with lower rates of medication adherence and increased rates of hospitalization and mortality, the study notes. “You can imagine, if someone needs to pay $10,000 per year, there’s a real decision to be made: Should I take this medication or should I not take this medication?” Pockros says.

A recent survey from AARP found that roughly 40 percent of adults age 65-plus who are eligible for Medicare have either skipped filling a prescription due to cost or know someone who has. Roughly 80 percent of adults 50 and older say prescription drugs are too expensive, the same report found.

Millions to benefit from new out-of-pocket cap

It’s not just people taking oral chemotherapy medications who are benefiting from the new out-of-pocket spending limit under the 2022 prescription drug law. An estimated 3.2 million people with a Medicare prescription drug plan will save on their medications in 2025 when annual out-of-pocket drug costs are capped at $2,000, according to a new report from AARP. By 2029, that number will increase to 4.1 million enrollees.

The AARP-backed law also allows Medicare to negotiate, for the first time ever, the prices of common and expensive medications. So far Medicare has negotiated prices for 10 drugs — including medications for diabetes, heart disease, kidney disease and arthritis — with more to come. The new negotiated prices for the first 10 drugs will save beneficiaries a collective $1.5 billion in out-of-pocket expenses when they take effect in 2026.

What’s more, the law has capped insulin expenses for Medicare beneficiaries at $35 a month, penalized drug companies who raise their prices faster than the rate of inflation, and expanded eligibility for Medicare Part D’s low-income subsidy, or Extra Help program.

“We’ve already seen the 2022 law yield significant savings for many older Americans,” says AARP Prescription Drug Policy Principal Leigh Purvis. “And we know we’ll see even bigger benefits as implementation continues over the next few years.”