Medicare prescription drug prices Archives

Medicare drug price negotiations

By Ed Crowe | General Articles | 0 comment | 4 January, 2024 | 0

Medicare drug price negotiations

Because of the high cost of some prescription drugs for Medicare beneficiaries, the CMS has announced the first 10 drugs that will be subject for Medicare drug price negotiations. The negotiations are part of the Inflation Reduction Act. Up until recently, Medicare has been able to negotiate prices for medical care beneficiaries receive but this did not include the costs of medications. This is about to change when the negotiated prices go into effect as of 2026.

Watch a quick video on the Medicare Part D changes

Medicare will negotiate with drugmakers over the cost for the some of the most expensive medications and does not apply to drugs that have a generic alternative. The first 10 medications chosen for negotiations are:

Eliquis (a blood thinner)
Enbrel (for rheumatoid arthritis)
Entresto (for heart failure)
Farxiga (for diabetes, heart failure & chronic kidney disease)
Fiasp & Novalog (for diabetes)
Imbruvica (for blood cancers)
Januvia (for diabetes)
Jardiance (for diabetes)
Stelara (for psoriasis & Chron’s disease)
Xarelto (a blood thinner)

According to the CMS, the 10 drugs above accounted for 20% of the Medicare Part D spending ($50.5 billion) during the period from June 2022 through the end of May 2023. Part D of Medicare covers prescriptions taken by beneficiaries at home. It does not cover medications administered by medical providers in medical facilities for treatment of things like cancer or other health conditions. In these situations, Medicare Part B covers the necessary drugs.

Click here to read the drug price negotiation fact sheet

Medicare beneficiaries spend billions of dollars for prescription drugs

Because of the high cost of some essential medications, beneficiaries sometimes have to either limit basic needs or go without the drugs that help maintain their quality of life. All the while, drug manufacturers rake in record setting profits.

These 10 drugs are just the beginning

This list of 10 drugs is just the starting point. In 2027 Medicare hopes to add 15 more drugs and even more in the years that follow. This list will grow each year as long as the drug manufacturers are unsuccessful in their attempts to stop the drug cost negotiations.

Find out about the Medicare prescription payment program.

What will drug manufacturers do

If the drug companies do not agree to the negotiations, they face possible tax penalties. Drug manufacturers can avoid the tax penalty if they remove their drug from the Medicare market. However, if they do that, they will take lifesaving drugs from Medicare beneficiaries as well as lose a large part of their market share.

Some large drug companies are seeking legal counsel to stop the drug price negotiations. They argue that the loss in income will affect their ability to fund necessary research and development and that in turn will reduce their ability to produce new medical treatments.

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Medicare prescription drug prices

By Ed Crowe | General Articles | 0 comment | 19 April, 2023 | 0

Medicare prescription drug prices

Every time you turn on the tv or talk to a Medicare beneficiary, you hear about Medicare prescription drug prices. The actual cost of prescription drugs with a Medicare plan can have a lot of moving parts.

Here is a list of some things that determine what Medicare beneficiaries pay for their prescriptions each year:

The premium for your Part D (if you have a stand alone prescription drug plan). This cost varies depending on the carrier and plan coverage option you choose. The price can be as little as about $7 up to about $100. This all depends on your personal needs.
Most plans have an annual deductible for certain medications. This depends on where the medication falls on the plan’s formulary. In other words, what tier it is classified as (Most plans do not charge a deductible for Tier 1 medications). In 2023 PDPs cannot exceed an annual deductible of $505 .
Copayments and coinsurance are the amounts you pay for covered drugs once you have met your plan’s deductible (if your plan has one). The amount you pay for a copay or coinsurance depends on the tier level assigned to your medication by your particular drug plan.
If you hit the coverage gap (sometimes called the donut hole), you will not pay more than 25% of the cost of covered brand name drugs. Many people don’t reach the coverage gap. Once you and your drug plan spend a specified total amount of money for your prescriptions ( $4,660 in 2023), you reach the coverage gap. spent a certain amount for covered drugs. This amount may change each year. Please note; people with Medicare who get Extra Help paying Part D costs do not fall into the coverage gap.

Some other things that effect the cost of your Medicare prescription drug prices:

Medicare provides “Extra help” to individuals who have limited income and resources. This is a program that helps pay for Medicare Part D costs including; premiums, deductibles and coinsurance as well as other costs. It will also cover any late enrollment penalty that an individual may have incurred. Some people automatically receive Extra Help if they are on full Medicaid coverage while others have to apply. After you apply for extra help, you will receive a letter stating what level of help you will receive and how much you will pay for your prescriptions.
You may have to pay a late enrollment penalty. The penalty is added to your (Part D) Medicare prescription drug plan premium. This penalty applies after the initial enrollment period is over; if there was a period of 63 or more days in a row where you did not have either Medicare Part D or other credible prescription drug coverage.
In most cases, you will pay the penalty for as long as you have Medicare Part D. Please note: this applies even if you have a $0 Medicare advantage plan.

Medicare calculates the penalty by multiplying 1% of the “national base beneficiary premium” ($32.74 in 2023) by the number full months you didn’t have either Medicare Part D or other creditable drug coverage. The penalty amount is added to your monthly Part D premium by rounding to the nearest $.10.
Each prescription drug plan has it’s own monthly premium. This amount varies by carrier and plan offered. It can be helpful to enlist the help of a licensed Medicare agent to find a plan that covers your prescriptions best.

Important: The inflation reduction act may change the amount Medicare beneficiaries pay annually for their medications; click here to learn more.

Additionally; The cost for Part D covered insulin drugs is now capped at $35 for a one month supply. A deductible does not apply to this amount. If you receive either a 60 or 90 day supply of insulin, The price cannot exceed $35 for each month’s supply as long as it is a Medicare covered insulin brand.

Sometimes the cost for a particular prescription is higher than you had anticipated. If this is the case, ask your doctor if there is a lower cost alternative. You can also check with your prescription drug plan provider and see if they cover an alternative drug at a better rate. If you want more information on drug prices, visit the cms.gov website where you can view a list of year-to-year drug price information. This is general information on prices and increases. It may not match what you pay.