Inflation Reduction Act and Medicare

The Inflation Reduction Act provides meaningful financial relief for millions of people with Medicare by expanding benefits, lowering drug costs, and strengthening Medicare for the future.

New Updates in the Medicare Drug Price Negotiation Program

The second round of the Medicare Drug Price Negotiation Program, established under the Inflation Reduction Act, has kicked off with the selection of 15 more drugs covered under Medicare Part D. The drugs selected are:

Between November 2023 and October 2024, about 5.3 million people with Medicare Part D coverage used these drugs to treat a variety of conditions, such as cancer, type 2 diabetes, and asthma. The 15 drugs accounted for $41 billion in total Medicare Part D spending during that time period.

The negotiations with participating drug companies for these 15 drugs will occur in 2025 and any negotiated prices will become effective in 2027.

Medicare previously successfully negotiated new, lower prices for the first 10 drugs selected, with those lower prices becoming effective in 2026.

New in 2025: $2,000 Out-of-Pocket Cap

This year, people with Medicare Part D prescription drug coverage will benefit from a new $2,000 out-of-pocket cap on prescription drug costs. The new out-of-pocket cap is just one of the ways the Inflation Reduction Act is working to lower drug costs and make health care more accessible for everyone.

About 11.3 million Part D enrollees are projected to meet the $2,000 out-of-pocket cap in 2025. For these 11.3 million enrollees, total out-of-pocket savings are projected to be about $7.2 billion annually, for an average of about $600 annually per enrollee. Check out how much people with Part D coverage saved in the first part of 2024 thanks to the cap.