The prices for 25 prescription drugs that Medicare’s Part D spends the most on have nearly doubled since they first became available, a recent analysis reveals. These brand-name medications, in use for an average of 11 years, have seen price increases averaging 98 percent, far outpacing the annual rate of inflation. These drugs, which are not included in the initial round of Medicare price negotiations, are crucial for more than 7 million enrollees treating conditions such as diabetes, cancer, and chronic respiratory diseases, accounting for nearly $50 billion in total Part D spending in 2022.
“Brand-name drug prices have been increasing faster than the rate of general inflation for decades, putting life-saving medications out of reach for millions of patients who need them,” said Leigh Purvis, a prescription drug policy principal. A report, released on January 9, highlighted that these price increases typically build on already high launch prices, with the median price of a new brand-name prescription drug reportedly estimated at $300,000 per year. Nearly 90 percent of adults 65 and older take prescription drugs, yet many struggle to afford them.
A 2023 report in JAMA Network Open indicated that a significant share of older adults skip medication doses or delay refills due to high costs. Furthermore, a survey found that nearly half of adults aged 50-plus have either skipped filling their prescriptions or know someone who has due to cost. Under the standard Part D benefit, enrollees are responsible for 25 percent of their drug costs from the time they reach their deductible until their out-of-pocket expenses on covered medications reach a new cap of $2,000, which came into effect on January 1.
Key drugs double in price
This change is designed to help millions of older adults save money on their prescription drugs. The 2022 prescription drug law includes provisions to help keep prices in check.
For example, drug companies must pay a penalty to Medicare when they increase the prices of their medications beyond inflation rates. The law also allows Medicare to negotiate prices for a selection of drugs based on certain criteria. Medicare is expected to save an estimated $6 billion and enrollees another $1.5 billion in 2026 due to these negotiated prices.
The first round of negotiations includes 10 widely used medications. Health officials will select up to 15 more drugs for negotiation by February 1 and will continue to select additional drugs every year. These measures aim to moderate prescription drug practices and make medications more affordable for Americans.
The soaring costs of essential prescription drugs pose significant challenges for Medicare beneficiaries. New legislations and price negotiation initiatives are steps toward making these medications more accessible and affordable, thereby improving the health outcomes of millions of older adults.