54 Drugs That Will Be Less Expensive for Some People With Medicare

Older Americans could see lower payments on meds used to treat cancer, pneumonia and more

Rachel Nania,

AARP

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En español

Published September 30, 2024

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AARP (Source: Getty Images (2))

Some people with Medicare could end up spending less money on potentially lifesaving medications through the end of the year.

The U.S. Department of Health and Human Services (HHS) announced that 54 drugs available through Medicare Part B will have a lower coinsurance rate between Oct. 1 and Dec. 31, since the prices set by their manufacturers have risen faster than the rate of inflation.

Drugs that fall under Part B are typically administered in a doctor’s office or hospital and can include cancer treatments, Alzheimer’s treatments and injectable osteoporosis medications.

Under a provision in the AARP-backed prescription drug law passed in 2022, the coinsurance rates for these 54 medications will be 20 percent of what the price would have been if it increased with inflation, which will be less than what the beneficiary would pay otherwise. Drugmakers will also face penalties for the price hikes in the form of a rebate to Medicare, and these funds will be used to help ensure the sustainability of the national health insurance program that provides coverage to more than 67 million Americans who are older or have a disability.

Some could see significant savings

More than 822,000 people with Medicare use the 54 selected drugs annually to treat conditions such as cancer, osteoporosis and pneumonia. According to HHS, some people with Medicare taking these medications could see savings in the last quarter of the year that range from $1 a day to more than $3,000 a day.

How much each person pays for their medications varies, depending on whether they have additional insurance that covers or reduces Part B’s 20 percent coinsurance. The list price for some of these drugs is hundreds of thousands of dollars per treatment.

“No one should have to choose between paying for their health care or putting food on the table,” HHS Deputy Secretary Andrea Palm said in a news release. “The Inflation Reduction Act is all about bringing down the price of health care and making sure the American people benefit.”

The Medicare Prescription Drug Inflation Rebate Program is just one provision under the 2022 law that’s aimed at lowering drug prices and related out-of-pocket costs. The law also gives Medicare the power to negotiate lower prices for certain prescription medications. The first batch of negotiations included 10 common and costly medications, and when the lower prices take effect in 2026 they will save people with Medicare prescription drug plans a collective $1.5 billion in out-of-pocket expenses, health officials project.

“Discouraging price increases above the rate of inflation by drug companies and negotiating lower prices on some of the most expensive and most frequently used drugs in the Medicare program delivers on our promise to bring savings to Medicare enrollees,” Centers for Medicare & Medicaid Services Administrator Chiquita Brooks-LaSure said in a news release.

Another key provision in the law caps annual out-of-pocket prescription drug expenses at $2,000 starting Jan. 1. The new limit is expected to benefit nearly 3.2 million older Americans with a Medicare prescription drug plan in 2025, AARP research found. That number will swell to more than 4 million in 2029.