Americans pay twice as much for prescription drugs as consumers in other countries, which is why 1 in 4 of us is unable to afford life-improving medications. Democrats have responded to this crisis. The Inflation Reduction Act (IRA), passed by Congress without a single Republican vote and signed into law by President Biden on August 16, 2022, is already making a difference for older Americans and people with disabilities on Medicare.
Here’s what this historic law does:
Caps insulin co-pays at $35/month. More than 3 million beneficiaries with Medicare Part D and Medicare Advantage Prescription Drug Plans are benefitting from the insulin cap, which went into place January 1, 2023.
Makes all recommended adult vaccines free. More than 4 million Medicare beneficiaries are now able to get immunizations at no cost. Before this year, the cost of vaccines – for example, several hundred dollars for the shingles vaccine -- meant many seniors and people with disabilities couldn’t afford to get protection.
Requires rebates if prescription drug corporations raise prices above inflation. Responding to corporations’ long-standing practice of raising prices far above the rate of inflation, the IRA requires that manufacturers rebate any increase that exceeds inflation back to Medicare.
Caps out-of-pocket drug costs to Part D beneficiaries. Starting in 2024, Medicare Part D beneficiaries will no longer face any cost-sharing when their drug costs hit the catastrophic threshold (under previous law, there was a 5% cost-sharing requirement with no limit). The next year, 2025, there is a new $2,000 annual out-of-pocket limit for covered drugs.
Requires Medicare negotiate to lower prices for the high-priced, top-selling Medicare drugs. Before Democrats acted, drug manufacturers were free to charge whatever prices they wanted. The IRA requires that high-priced Medicare drugs be negotiated. On August 29, 2023, the first 10 drugs to be negotiated were named (with lower prices available starting in 2026), including Eliquis, Jardiance, Xarelto, and Januvia. An additional 15 drugs will be negotiated for 2027 and in 2028, then an additional 20 drugs each year beginning in 2029.
Democrats are working hard to implement these critical IRA provisions, but Republicans and the drug corporations are focused on rolling back the progress we have made. Many Republican candidates have already pledged to repeal the IRA, putting drug corporations back in charge of setting prices. PhRMA, Pfizer and other drug corporations are suing to overturn the IRA, claiming they have a right to charge excessive prices.
Democrats will continue to stand strong in the fight to make prescription drugs available and affordable for all Americans.