A research brief published last week in the Annals of Internal Medicine announced that many Medicare beneficiaries taking common prescription medications could save nearly $700 per year.
The study, led by Grace Castle, and Jihye Han, PharmD, MPH, both second-year Health Policy PhD students, found that Americans enrolled in standalone Medicare Part D plans are projected to save an average of $685 per year, and people with Medicare Advantage plans could save about $470.
“Amidst other Inflation Reduction Act policies taking effect, including the Medicare Part D out-of-pocket spending cap, we were interested in how the new Medicare Drug Price Negotiation Program specifically affected out-of-pocket spending for seniors,” Castle said. “Since other policies are working to contain patient spending, we were curious if the negotiations that lower Medicare reimbursement also pass on savings to patients.”
Castle, Han, Stacie Dusetzina, PhD, Ingram Professor of Cancer Research and Professor of Health Policy, as well as colleagues at Harvard Medical School, examined the potential savings from the Medicare Drug Price Negotiation Program (MDPNP). The MDPNP was a component of the federal Inflation Reduction Act, which became law in 2022 and gave the federal government the ability to negotiate prices for certain prescription drugs that were among the highest expenditures for Medicare.
Negotiated prices took effect earlier this year, giving the researchers an opportunity to examine new prices and their impacts on out-of-pocket patient spending.
The study found that patients using several commonly prescribed drugs like Xarelto, Jardiance, Eliquis and others could see their annual out-of-pocket costs reduce by 26 percent.
Some beneficiaries taking the three highest-priced drugs — Imbruvica, Enbrel and Stelara — might not see any savings, however, because they already reach Medicare’s annual spending cap.
The researchers concluded that these negotiated drug prices will provide meaningful savings for many Americans who stay below the annual spending cap, and could reduce federal spending on Medicare.
“We will continue to investigate the impacts of the Inflation Reduction Act on prescription drug spending and access to care,” Han said.
