The Medicare Part D drug prices for the top 25 prescripted ones have nearly doubled since entering the Market, a study found!
According to a recent AARP report, the average list prices for the top 25 prescription drugs covered by Medicare Part D have nearly doubled since they were first introduced. This price growth often surpasses inflation, highlighting a significant issue for seniors and Medicare beneficiaries.
On average, these seniors and beneficiaries take four or five prescription drugs every month. As a result, one in five older adults report using cost-coping strategies, such as not filling a prescription or skipping doses, to save money.
AARP analyzed the top 25 Part D drugs as of 2022, which are not yet subject to Medicare price negotiations. Leigh Purvis, AARP’s prescription drug policy principal, noted that some of these drugs are likely to be included in future negotiation rounds.
The study found thata significant portion of current prices is due to increases after the drugs launched. Those 25 drugs prices have increased 98% since market entry, with some drugs increasing by up to 293%. These medications have been on the market for an average of 11 years, ranging from 5 to 28 years.
Good News for Medicare Beneficiaries
In August 2024, the Biden administration announced the first 10 drugs eligible for negotiation under the Inflation Reduction Act, which could save Medicare approximately $6 billion by 2026. By February 2025, Medicare is expected to release a list of 15 additional drugs for negotiation, slated to take effect in 2027. The Inflation Reduction Act introduced several other measures to help Medicare recipients manage drug costs:
- Annual Out-of-Pocket Cap: starting in 2025, beneficiaries will pay no more than $2,000 annually for Part D prescription drugs. They can also spread these costs over the year.
- Insulin Cap: medicare beneficiaries now pay a maximum of $35 per month for insulin.
- Expanded Support: greater access to financial assistance for low-income beneficiaries through the enhanced Extra Help program.
These changes are crucial for individuals who previously faced out-of-pocket expenses exceeding $10,000 annually, according to Purvis. “The fact that there’s now a limit is incredibly important for them, but then also really important for everyone. Because everyone is just one very expensive prescription away from needing that out-of-pocket cap“, Purvis added.
“We do hear about people having to choose between splitting their pills to make them last longer, or between groceries and filling a prescription. The pressure of costs and prescription drugs is real, and especially for people with low incomes, who are trying to just meet their day-to-day needs”, said Natalie Kean, director of federal health advocacy at Justice in Aging.