The Biden Administration has put in place changes that are going into place starting next year that will run through 2034. Three additional drug payment programs were announced on Tuesday, February 14th. We will review current and in process and planned changes.
Many people need to be made aware of how drugs are priced in the United States. Pricing is relatively unregulated and consequently the prices can rise beyond inflation prices. The ultimate goal of pharmaceutical companies when rising drug prices is to generate the most revenue.
When pricing a drug, pharmaceutical companies consider:
Other beneficiaries receiving partial low-income benefits typically pay some portion of the Part D premium and standard deductible, 15% of the coinsurance, and modest copayments for drugs above the catastrophic threshold.
Additional beneficiaries receiving full low-income benefits pay no part D premium or deductible. They only pay small copayments for prescription drugs until they reach the catastrophic threshold when they face no cost-sharing.
The expanded eligibility will benefit low-income Black and Hispanic Medicare beneficiaries, particularly because they are more likely than white beneficiaries to have incomes between 135% and 150% of FPL.
In 2025 there will be a new Manufacturer Discount Program in Medicare. It will require drug manufacturers to pay discounts on certain name-brand drugs and other types of drugs called biologics and biosimilars, both in the initial coverage phase, (it is 10%), and in the catastrophic phase,( it is 20%).
The Inflation and Reduction Act requires drug companies to pay rebates if drug prices rise faster than inflation. It also limits insulin cost sharing to $35/month in Part B and D. It reduces costs and improves coverage for adult vaccines in Medicare Part D, Medicaid and CHIP.
In 2024 the 5% coinsurance for Part D catastrophic coverage will be eliminated. It expands eligibility for Part D low-Income subsidy full benefits up to 150% of the Federal Poverty Level. In 2024-2030 the Medicare Part D premium growth is limited to no more than 6% per year.
Companies that refuse to negotiate with Medicare will face a 95% tax penalty on that drug.
The number of people who will see lower out-of-pocket drug costs under this provision, and the amount they save, will depend on which drugs are subject to negotiation, the number of people with Medicare who use those drugs, and the price reduction achieved through the negotiation process.
If you’re entering the U.S. with FDA-regulated products, in personal baggage, or sending products by mail or courier from abroad, the FDA has rules that govern these importations.
Ensure you know the drug you are trying to bring back, for what reason, and how much. Ensure you know the country laws if you take drugs from the U.S. to other countries. To find out what you can and cannot import, seek guidance from DEA.gov.
I would recommend that you keep up with all of the changes that are planned to take effect and also what changes, if any, may be impacted by new administrations. Review your insurance program yearly and make changes appropriately.
If you have any questions or concerns, contact a HealthTree Financial Coach who would gladly assists you.
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about the author
Diahanna is the Financial Program Manager for the HealthTree Foundation, specializing in financial help for multiple myeloma and AML patients. As a professional financial consultant and former caregiver of her husband who was diagnosed with multiple myeloma, Diahanna perfectly understands the financial issues facing myeloma patients.