In a move to tackle exorbitant price gouging from pharmaceutical companies, President Biden's Inflation Reduction Act is set to save nearly 750,000 seniors thousands of dollars per dose on prescription medications. Today, during a visit to the National Institutes of Health Clinical Center in Maryland, President Biden will announce that dozens of pharmaceutical companies will be required to pay rebates to Medicare for their outrageous price hikes.

According to recent data released by the Department of Health and Human Services (HHS), 48 Medicare Part B drugs raised their prices faster than inflation in the last quarter of 2023. In fact, some drug companies consistently raised prices of certain medications at a rate higher than inflation throughout the past year. To combat this price gouging, President Biden's Inflation Reduction Act cracks down on these practices, mandating that companies pay rebates back to Medicare.

The implementation of the Inflation Reduction Act brings significant relief to seniors who rely on these drugs. Medicare beneficiaries taking the identified 48 prescription drugs, including those used to treat cancer and fight infections, can expect lower coinsurance and decreased out-of-pocket costs ranging from $1 to an average of $2,786 per dose.

President Biden had made a promise to tackle the issue of high prescription drug costs for seniors and families, and through the Inflation Reduction Act, he is delivering on that commitment. The Act grants Medicare the authority to directly negotiate lower drug prices, caps the cost of insulin for Medicare beneficiaries at $35, eliminates costs for recommended adult vaccines, and ensures drug companies pay rebates if they raise prices faster than inflation. Additionally, the Act provides substantial health insurance savings of approximately $800 per year for nearly 15 million Americans.

Despite strong opposition from Republicans in Congress, who seek to repeal the Inflation Reduction Act and defend the interests of Big Pharma, President Biden remains steadfast in his fight to lower costs for hardworking Americans and ensure equitable access to affordable healthcare.

In line with the effort to make medicines affordable, the Biden-Harris Administration has introduced various measures. Last week, a proposal was announced to hold drug companies accountable for making federally-funded products available to the public at reasonable prices. As part of this initiative, the federal government would have the ability to license patents to competitors, fostering competition and subsequently lowering costs for families.

In addition, the Administration is taking steps to enforce fair pricing in contract negotiations for medical products. The Administration for Strategic Preparedness and Response (ASPR) aims to uphold the best value for taxpayers by including fair pricing provisions in contract agreements. This approach ensures that potentially life-saving treatments developed or purchased with taxpayer funds are priced reasonably and in line with comparable global markets.

The Biden-Harris Administration continues to prioritize reducing prescription drug costs for millions of Americans through the Inflation Reduction Act. In 2023 alone, the Act saved nearly $800 for 15 million Americans in health insurance savings, capped insulin costs at $35 for Medicare beneficiaries, and made recommended vaccines free for millions of seniors.

Looking ahead, the Act will bring further cost-savings to Americans. In 2024, Medicare Part D enrollees will no longer have to pay 5% co-insurance when they reach the catastrophic phase of their benefit, significantly capping their prescription drug costs. Furthermore, when the $2,000 out-of-pocket cap on prescription drugs applies in 2025, approximately 19 million seniors and beneficiaries could save $400 per year, with the highest drug cost enrollees estimated to save an average of $2,500 per year.

The impact of the Inflation Reduction Act's Medicare Price Negotiation program is also anticipated in the coming years. By 2026, negotiated prices for the first group of drugs selected for negotiation are set to benefit millions of seniors. In 2022 alone, seniors spent $3.4 billion in out-of-pocket costs on these ten drugs, used to treat various common conditions. A recent report reveals that if the Medicare price negotiation program had been in effect in 2021, Part D out-of-pocket costs would have dropped by 23% for those taking the ten costliest drugs at the time.

President Biden's Inflation Reduction Act marks a significant step towards making prescription medications more affordable for seniors and families. Amid opposition, the Act has already yielded substantial savings and promises further relief in the coming years, ensuring that access to affordable healthcare remains a priority for the Biden-Harris Administration.