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Some of you may remember the Article we wrote last year after it was announced that Medicare would start negotiating Prescription Drug Prices in 2024. Medicare will deal directly with Drug Manufacturers/Pharmaceutical Companies. Initially, they would take the ten most prescribed (Non-Generic) Medications for 2024. Then, they would continue to negotiate 10 per year moving forward. Although the new pricing will not go into effect until January 1, 2026, I wanted to show you their progress.
THE INFLATION REDUCTION ACT OF 2022
I still have to suppress a laugh whenever I hear the Inflation Reduction Act mentioned in public because it has had no direct effect on lowering inflation. That was just politics at its finest to get lawmakers too lazy to read the bill to vote for it. At 800 billion dollars, the goal was to help reduce climate change, enhance energy security, and lower the medication cost for seniors. However, in one man's humble opinion, this will not affect reducing costs as long as they continue to add layers to the Federal Government.
However, they are making good on their attempt to assist seniors with the never-ending increase in medication costs. With all the lobbyists in Washington, DC, who are paid generously by the pharmaceutical companies, it will continue to be challenging. The best thing our United States government can and should do is open our own FDA manufacturing plants to produce the medications here in the US and eliminate all intermediaries.
HOW THE INFLATION REDUCTION ACT WILL IMPACT MEDICARE PART D STARTING ON JANUARY 1, 2025
Let's start with the good news. The Medicare Donut Hole, the Catastrophic Coverage Phase of Medicare Part D Prescription Drug Plans, has been eliminated. The government has caped Part D Medications of $2K, meaning no Medicare Beneficiary will pay more than $2,000 annually for prescription medications. This is excellent news for many seniors burdened with expensive medicines. However, there is going to be collateral damage as a result of these moves.
Now, let's look at the bad news. We are based in Arizona, and Arizona had 27 Stand-Alone Medicare Part D plans in 2023. But in 2025, we will only have 1o plans available to the public. Worse yet, the costs of lowering the Out-Of-Pocket Drug Cost for Medicare Beneficiaries are forcing Insurance companies to increase the Part D Deductible and the premiums for their Drug Plans.
THE MEDICARE PART D DEDUCTIBLE
Beginning on January 1, 2025, the Medicare Part D Deductible will increase by $45, from $545 to $590. Of course, different plans can have lower thresholds, but the maximum deductible will be $590.
THE MEDICARE PART D DRUG PLAN PREMIUMS
There may only be two Drug Plans with Premiums under $35 monthly. Most companies seem to have honed in on a suggested Premium range of $48 per month, which is crazy. On the bright side, the "Premium" Drug Plans that have previously had premiums over $100 are lowering their premiums significantly.
It is simply too early to forecast what will happen in 2026; the Insurance companies will be taking a hard look at Data from the first six months of 2025 when they start discussing their strategy for 2026 and beyond. Some companies may come back into the Market, some may lose plan availability, and others may drop out of the prescription Drug Market altogether. However, because many of these companies receive so much money from the government for their Medicare Advantage plans, I do not see many more dropping out; only time will tell.
VACCINATIONS COVERED UNDER MEDICARE PART D
A few years ago, Medicare began covering annual vaccinations for Medicare Beneficiaries; as of 2024, you just needed to go to any "preferred Pharmacy" for your plan, and they would administer the shots at the pharmacy, and Medicare would pay for it. But they are made more accessible. Starting on January 1, 2025, you can receive these Vaccination/Inoculations at any licensed pharmacy; it does not have to be a pharmacy associated with your particular plan.
MEDICARE PART B DRUGS
Drugs you may receive in a doctor's office, such as Prolia, Evenity, Leqvio, and other medicines that must be administered only by a doctor, are not included in any of the changes. These changes affect only Medicare Part D.
RESULTS FROM MEDICARE'S DRUG NEGOTIATIONS THIS PAST YEAR
Up until this year, Medicare was not permitted to directly negotiate drug pricing with the manufacturers. Medicare (the government) had to accept the prices given to them by the Pharmaceutical companies.
HERE ARE THE DRUGS THEY TARGETED FOR 2024
Eliquis
Enbrel
Entresto
Fiasp
Farxiga
Imbruvica
Januvia
Jardiance
Stelara
Xarelto
RESULTS OF MEDICARE'S PRESCRIPTION DRUG COST COMPARISONS
Drug Name | Negotiated Price (Per 1 month Supply) | Change in Cost |
Januvia | $113 | -79% |
Fiasp, Fiasp Flex Touch, Fiasp Pen Fill, NovoLog, LovoLog Flex-Pen, NovoLog Pen Fill | $119 | -76% |
Farxiga | $178.50 | -68% |
Enbrel | $2,355 | -67% |
Jardiance | $197 | -66% |
Stelara | $4,695 | -66% |
Xarelto | $197 | -62% |
Eliquis | $23 | -56% |
Entresto | $628 | -53% |
Imbruvica | $9,319 | -38% |
HOW WILL THESE NEGOTIATIONS IMPACT SENIORS THE MOST
For Medicare beneficiaries, these negotiations might profoundly affect their quality of life by lowering their out-of-pocket costs.
The Administration has indicated that they foresee a minimum savings of more than 6 Billion Dollars in 2026 when these new prices go into effect. These costs are also expected to lower by over 25 billion dollars by year ten.
MEDICARE BEING ABLE TO NEGOTIATE ITS OWN DRUG PRICES WILL HELP SHAPE THE FUTURE OF MEDICARE
While this is a huge step forward for Medicare Part D beneficiaries, it is a work in progress. We all need to be patient. The newly negotiated prices from the Chart we showed earlier in this article will officially be implemented beginning January 1st, 2026. At least ten additional re-negotiated medications will be added over the next decade.
Of course, not everyone’s thrilled about these changes. Most Pharmaceutical companies are very concerned about the long-term impact of these changes. But please do not shed a tear for them. I hope that when they need to cut some of the "fat" from their budgets, they start with the ungodly amount of money they budget for lobbyists and follow that up with changing their philosophy to develop medicines that help people but that do not send them to the poor house. My hope against hope is that it will focus many of these players on re-evaluating natural remedies wherever possible and when they are effective.
WRAPPING THINGS UP
We hope you enjoyed this article and that you found it to be informative and easy to understand. Please feel free to contact me anytime and let me know your comments at mike@bradenmedicare.com
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