WASHINGTON, D.C. - We’ve heard how the costs of prescription drugs can impact, even deplete, people’s savings. In an effort to curb costs, President Biden recently signed the Inflation Reduction Act. The bill would in part, address this issue. However, these changes won’t happen immediately.  

Senator Bob Casey (D- PA), President Biden and other Democrats are touting the Inflation Reduction Act. The bill was recently signed into law. In part, it aims to lower healthcare costs. 

“To cap the out-of-pocket costs for Medicare Part D beneficiaries and 2,000 per year for prescription medications and allowing Medicare to finally at long last to finally be able to negotiate for lower prices,” said Sen. Casey.  

But these changes won’t happen immediately. Starting next year, the bill will limit the cost sharing for insulin to 35 dollars per month for seniors. In 2025, there will be a two-thousand-dollar cap for out-of-pocket spending for Medicare recipients. According to the Centers for Medicare and Medicaid Services, by 2023, Medicare will select and announce the first ten drugs for negotiation from a list of the Medicare Part D drugs without competition. However, the negotiated drug prices for these first ten drugs won’t be implemented until 2026. 

Representative Mike Kelly (R- PA) said he’s open to looking into lowering drug prices.   

“I think all of us should have access to life saving pharmaceuticals,” said Kelly. “There's just no question about that. Some can afford some cannot afford. At that point we need to take a look at what it is that can we do to subsidize those who cannot afford it? It’s just basically the humaneness that’s in us but again, the economics of it are important. If you want to talk about doing that, please don’t put it in a big spending bill that’s one and a half trillion dollars and tell me that this is what you need to do. It's a no. Let's get it down to that one issue and see what we can do.”   

Casey said there’s more work to be done on lowering prescription drug costs.  

“Implementing all of this is going to be critically important but I think the next legislative step is to make sure that this cap on the cost of insulin covers every American with insurance, not simply in this case, seniors,” said Casey.  

Centers for Medicare and Medicaid Services sent us this statement: 

CMS is working to implement its provisions of the Inflation Reduction Act. The Inflation Reduction Act establishes a new Drug Price Negotiation program under which the Secretary of the Department of Health and Human Services (HHS) will bilaterally negotiate with manufacturers of certain high spending brand-name drugs and biologicals under Medicare without price competition that are selected for negotiation in order to establish a maximum fair price. 

 By September 1, 2023, Medicare will select and announce the first 10 drugs for negotiation from a list of the highest spending brand-name Medicare Part D drugs without competition. Negotiated drug prices for these first 10 Medicare Part D drugs will be effective in 2026. Medicare will select and negotiate 15 Part D drugs for 2027, 15 Part B and Part D drugs for 2028, and 20 Part B and Part D drugs for each year thereafter. An excise tax or civil monetary penalties will be imposed on manufacturers that are noncompliant with negotiation requirements for selected drugs. 

 CMS will provide more information about the methodology and process in the future as we work to implement the law.