Updates On Medicare Drug Price Negotiations

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 and pharmaceutical companies. Initially, they would select the 10 most-prescribed (Non-Generic) Medications for 2024. Then they would continue to negotiate 10 per year. 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 mitigate climate change, enhance energy security, and lower the cost of medications 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 fulfilling their commitment to assist seniors with the ongoing increase in medication costs. Given the number of lobbyists in Washington, DC, who pharmaceutical companies generously compensate, it will remain challenging. The best thing our United States government can and should do is open its own FDA-manufacturing plants to produce medications 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 capped Part D medications at $ 2,000, 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, collateral damage is inevitable 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. However, in 2025, we will have only 10 plans available to the public. Worse yet, the costs of lowering out-of-pocket drug costs for Medicare Beneficiaries are forcing Insurance companies to increase the Part D Deductible and premiums for their Drug Plans.

THE INFLATION REDUCTION ACT OF 2022 AND ITS IMPACT ON MEDICARE PART D DRUG PRICES

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 be only two Drug Plans with Premiums under $35 per month. Most companies seem to have settled on a suggested Premium range of $48 per month, which is excessive. 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; insurance companies will take a hard look at Data from the first six months of 2025 when they begin discussing their strategy for 2026 and beyond. Some companies may reenter the Market, some may lose plan availability, and others may exit the prescription Drug Market altogether. However, because many of these companies receive substantial government payments for their Medicare Advantage plans, I do not expect many more to drop 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 need only go to any "preferred Pharmacy" for your plan, and they would administer the shots at the pharmacy, and Medicare would pay for them. But they are made more accessible. Starting on January 1, 2025, you can receive these vaccinations/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

Until this year, Medicare was not permitted to negotiate drug prices directly with manufacturers. Medicare (the government) had to accept the prices set by pharmaceutical companies.

HERE ARE THE DRUGS THEY TARGETED FOR 2024

1. Eliquis

2. Enbrel

3. Entresto

4. Fiasp

5. Farxiga

6. Imbruvica

7. Januvia

8. Jardiance

9. Stelara

10. 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 may substantially affect their quality of life by reducing out-of-pocket costs.

The Administration has indicated that it anticipates savings of more than 6 Billion Dollars in 2026 when these new prices take effect. These costs are also expected to decrease by more than 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 shown in the chart earlier in this article will be implemented effective 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 prompt many of these players to re-evaluate natural remedies wherever possible and when effective.

WRAPPING THINGS UP

We hope you found this article informative and easy to understand. Please feel free to contact me anytime and let me know your comments at mike@bradenmedicare.com