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Centers for Medicare & Medicaid ServicesNewsroom




FOR IMMEDIATE RELEASE
August 16, 2024

Contact: CMS Media Relations
(202) 690-6145 | CMS Media Inquiries [ https://www.cms.gov/About-CMS/Public-Affairs/PressContacts/Media-inquiries1.html ]

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*Commemorating the 2nd Anniversary of the Biden-Harris Lower Cost Prescription Drug Law*

" The Inflation Reduction Act is saving Americans millions in lower prescription drug costs and making health insurance more affordable. "

Two years ago today, President Biden signed into law historic legislation to lower health care costs for millions of Americans. The Inflation Reduction Act, also known as the lower cost prescription drug law, created the first ever annual cap on out-of-pocket drug costs for people with Medicare, capped the cost of each covered insulin at $35 per month, granted Medicare the power to directly negotiate drug prices, and made Affordable Care Act (ACA) marketplace plans more affordable, leading to the lowest uninsured rate in history.

“Two years in, the Inflation Reduction Act is lowering health care costs for millions of Americans,” said U.S. Department of Health and Human Services (HHS) Secretary Xavier Becerra. “As a result of this law, we’ve achieved something decades in the making: putting Medicare on a level playing field by negotiating for lower drug prices. The Biden-Harris Administration is delivering lower prescription drug costs, making health insurance more affordable, and making the economy work for working families.”

“As we celebrate the second anniversary of the Biden-Harris Administration’s historic Inflation Reduction Act, this groundbreaking law is improving access to lifesaving treatments for people with Medicare while strengthening the Medicare program now and for future generations. Millions are already benefiting from lower drug costs through a cap on insulin costs, free recommended vaccines, more financial assistance, and a cap on costs for Medicare enrollees with high drug costs,” said Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure. “The prescription drug law will continue to deliver additional savings, with a cap on out-of-pocket costs for every person with Medicare prescription drug coverage beginning in 2025, historic new negotiated, lower prices for some of the most expensive and most utilized medications that will go into effect in 2026, and future drug price negotiations in the years ahead.”

The Biden-Harris lower cost prescription drug law is already working to reduce costs for millions of seniors and people with disabilities with Medicare. Yesterday, the Biden-Harris Administration announced new, lower prices for the 10 drugs in which Medicare and drug companies came to an agreement in the first cycle of negotiations under the new Medicare Drug Price Negotiation Program.

If the new prices had been in effect last year, Medicare would have saved an estimated $6 billion, or approximately 22 percent, across the 10 selected drugs. These negotiated prices range from 38 to 79 percent discounts off of list prices. About nine million people with Medicare use at least one of the 10 drugs selected for negotiation. People with Medicare prescription drug coverage are expected to see aggregated estimated savings of $1.5 billion in their personal out-of-pocket costs in 2026.This historic announcement is the culmination of decades of advocacy and will result in a stronger Medicare program for generations to come.

In addition to this monumental achievement, over the course of the past two years, several provisions to lower drug prices have taken effect, including:


* Capping the cost of each covered insulin product at $35 per month in Medicare.


* Providing recommended vaccines for free to people with Medicare Part D.


* In 2023, more than 10 million people received a free vaccine.

* Capping out of pocket drug costs for some Medicare enrollees at about $3,500 in 2024.


* By April 1, 2024, over 260,000 people benefited from this cap in the catastrophic coverage phase, meaning they will pay no more out-of-pocket through the remainder of the year.

* Expanding eligibility for the Low-Income Subsidy program, also known as Extra Help, to provide more enrollees with $0 premiums, $0 deductibles, and fixed, reduced copays.


* Requiring drug companies to pay a rebate to Medicare if they raise their prices faster than the rate of inflation.

As the Biden-Harris Administration continues to implement the Inflation Reduction Act, the American people will continue to save money. In 2025, everyone enrolled in Medicare prescription drug coverage will have their out-of-pocket costs capped at $2,000. By April 1, 2024, more than 1.7 million people had already reached $2,000 in out-of-pocket costs on their prescription drugs.

In addition, the new, lower prices delivered through the negotiation process will take effect beginning January 1, 2026. Early next year, CMS will select up to 15 more negotiation-eligible drugs covered by Medicare Part D for the second cycle of negotiation.

The Inflation Reduction Act also increased health insurance coverage to the highest levels we’ve seen in American history. Today, more than 300 million Americans have health coverage, and this year, a record 21.4 million Americans signed up for health coverage through ACA marketplaces. That boost in enrollment is all thanks to the enhanced ACA subsidies made possible by the Inflation Reduction Act. This past year, four in five HealthCare.gov shoppers were able to find a plan for $10 a month or less.

However, the enhanced ACA subsidies are set to expire at the end of 2025 if Congress does not act. To ensure that millions do not lose access to affordable health coverage, it is imperative that Congress take action to make these enhanced subsidies permanent.

To learn more about how the Inflation Reduction Act is lowering costs for seniors and people with disabilities on Medicare, visit LowerDrugCosts.gov or MedicamentosBajoPrecio.gov.

To learn more about the new, lower prices under the Medicare drug price negotiation program, view HHS’s press release: https://www.hhs.gov/about/news/2024/08/15/historic-first-biden-harris-administration-successfully-negotiates-medicare-drug-prices-delivers-promise-lower-prescription-drug-costs-american-seniors.html

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