Medicare Drug Reduction Program

Yesterday, the current administration, announced that they had reached agreement with drug manufacturers on 10 drugs covered under Medicare Part D, for Medicare recipients, to become effective, January 1, 2026.

These negotiated 10 drug prices, compared to 2023 costs, are expected to save the Federal Medicare Program, a net $6 Billion. While those Medicare recipients, in Medicare Part D plans, are expected to save an estimated $1.5 Billion.

In addition, there is discussion, that the maximum out-of-pocket costs for prescription drugs, to a Medicare Part D recipient, would be capped at $2,000. I am not sure if that has to be approved by Congress.

Two of the prescription drugs, that I currently take, are on that schedule, Jardiance and Eliquis. I decided to look at what I have been spending, to determine what savings, if any, I might expect.

First, the current costs of a 30 day supply of Jardiance:

I PAY $131.99

Part D Plan 26.40

Total $158.39

If you were to purchase this at a pharmacy and had no insurance, the cost would be $733.32 for a 30 day supply.

The negotiated price, for a 30 day supply in 2026 is $197.00. That is higher than the total that I currently pay, plus what the Medicare Part D Insurer says that they pay. Will I see any savings? Based upon this, I don’t see any.

Now Eliquis:

I Pay $121.46

Part D Plan 218.55

Total $340.01

The 30 day price at the pharmacy, for someone without insurance, amounts to $713.28.

In 2026, the negotiated price is to be $231.00 for a 30 day supply. That amount is significantly lower than todays $340.01, but will I be the recipient of any of the total cost savings?

The press release yesterday isn’t specific, so it is difficult to say what the real benefit will be to Medicare Part D recipients.

I am insulin dependent and I currently pay $35.00 for a 30 day supply of Novolog. The negotiated price disclosed yesterday for a 30 day supply of Novolog amounts to $119.00. Today, a 30 day supply, purchased at a pharmacy without insurance, will cost you $313.15. The current cost of a 30 day supply, under Part D, is $72.70, with $37.70 being the Medicare Part D insurers cost. I don’t see any reduction in my personal cost going forward.

Another issue with insulin that no one will address, is that insulin dependent diabetics don’t take the same amount of insulin. As an example, I take approximately 60 units per day. In a 30 day month, that amounts to 1800 units.

My wife takes approximately 30 units a day. In a thirty day month, that amounts to 900 units. We each pay $35.00 for a thirty day supply but I receive 1800 units and she receives 900 units. There is no cost differential based on the quantity of insulin one takes. I have written to CMS-Medicare, as well as Congressional Representatives, to no avail.

Again, I think that the discussion yesterday on “negotiated drug prices” is a beginning, but I wonder whether those who have the power, truly understand “the devil is in the details.”

As to the $2,000. cap, I looked at my personal situation, and at the end of July, I have expended $2,103.94. I would expect to personally spend another $800. before the end of the year, for a total of approximately $2,900. Obviously, I probably have more prescriptions then the average person, so the $2,000. cap would benefit me. However, my wife will only be out of pocket approximately $600.for the year. The $2,000. cap will not benefit her.

The question that I think most folks are asking is “why is it that the negotiated prices don’t go into effect until January 1, 2026?” I heard one of the media reporters ask that question yesterday, without an answer. Why is it so difficult to get an answer? Could one answer be that the “Big Parma” wants to compensate for the reductions by having more time to reap higher prices?

The whole discussion concerning this drug cost reduction program began well over a year ago. Why has it taken so long? Why only 10 drugs? I guess time will tell if it truly benefits the average Medicare recipient. At least it is a beginning!

Jess Sweely

Madison, Va.

August 16, 2024