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Have you had some trouble paying for your prescription medication? For many seniors, the amount paid out-of-pocket for some medications can be staggering.
And while there are some ways to cut those costs, such as discount cards or manufacturer’s rebates, eventually those savings will dry up. And though you can try more affordable options to save money, such as using generic (and thus cheaper) medications and wearing an emergency alert button to help you avoid serious medical issues in the first place, sometimes there is just no substitute for a particular medication that might be rather pricey.
But now, there is exciting news for those who are on Medicare and use medications on a daily basis. In 2022, price negotiations for Medicare drugs became possible for the first time through the Inflation Reduction Act. In August 2023, the first ten drugs eligible for negotiation under that Act were announced.1
They include some of the most common medications that seniors and the elderly use on a regular basis:
· Eliquis. Used to prevent blood clots and stroke in those who are susceptible to them, especially those who have recently had knee or hip surgery.
· Jardiance. This is a drug that works in conjunction with other diabetes drugs to lower blood glucose levels.
· Xarelto. This helps treat or prevent blood clots.
· Farxiga. This works in conjunction with diet and exercise to treat Type 2 diabetes and helps protect the heart.
· Embrel. This drug treats various types of arthritis and helps avoid the joint deterioration that can occur with these conditions.
· Entresto. This is used to treat heart failure in older adults.
· Imbruvica. This targeted cancer drug works for mantle cell lymphoma and chronic lymphocytic leukemia.
· Stelara. This injection treats different types of psoriasis as well as Crohn’s disease and ulcerative colitis.
· Fiasp. This brand of insulin helps bring down high blood sugar levels.
· Insulins made by Novo Nordisk. This includes Novolog, which is the most popular type of insulin sold by the company.
Keep in mind that if you are on any of the medications listed here, it’s a good idea to have a medical alert pendant at your fingertips at all times. That’s because not only can some of these conditions make you a greater fall risk, taking medications to treat them can also lead to some side effects, such as dizziness or weakness. Having a way to reach out for help no matter where you are, day or night, is essential to good health, which also helps to keep spending down.
Why these Price Negotiations Matter to Seniors
Though Medicare does cover some prescription drugs and opting for a prescription plan covers even more, there are almost always some out-of-pocket costs for seniors. In fact, the Department of Health and Human Services reports that in 2022, those on Medicare paid out $3.4 billion in out of pocket costs. The average for those who didn’t get additional financial assistance was $6,500. For many, the majority of that cost went to pay for their prescription drugs.
The negotiations are crucial to bring down drug prices. Currently, pharmaceutical companies charge Americans more than three times what they charge those in other countries for the exact same medications. By Medicare entering into negotiations, the government is signaling that the American people expect to pay fair rates, not inflated ones, and that could mean some breathing room for your wallet.
As you might imagine, the pharmaceutical companies have filed numerous lawsuits to prevent these negotiations. However, until those lawsuits are ruled upon by the higher courts, the negotiations have begun.
Any negotiated prices will take effect in 2026. That could mean good news for up to nine million seniors in the United States who rely on Medicare coverage.
How the Negotiation Plan Works
Some parts of the Inflation Reduction Act are already in place. The most significant move caps the cost of insulin at $35 per vial per month for Medicare enrollees. This price cap is a wonderful thing for diabetics who rely on insulin for their good health and might have rationed the life-saving drug when it was sold at higher prices.
The Act also makes more vaccines available to seniors at no cost. This helps ensure that seniors get the protection they need, when they need it. They don’t have to worry about the out-of-pocket expense for life-saving vaccines.
Before the prices are negotiated down, pharmaceutical companies will face stiff penalties if their prices for any drugs rise faster than the rate of inflation.
Concerning these first ten drugs, the Centers for Medicare and Medicaid Services chose these medications because they are the ten on which Medicare pays the highest price, as well as because they have been on the market for several years without competition to bring the prices down. Between June 1, 2022 and May 31, 2023, those 10 drugs accounted for a whopping $50.5 billion in Medicare expenditures.2
Pharmaceutical companies can choose not to negotiate; however, if they don’t, they can face an excise tax of up to 95% of the cost of the medications in US sales. Or they can opt to pull their drugs from the Medicare and Medicaid markets altogether. The result of either option, however, would put a more significant dent in their bottom line than price negotiations would.
If the companies do negotiate, CMS expects the costs of the drugs to drop anywhere from 25 to 60% off the average manufacturer price.
After these 10 drugs are negotiated, CMS will add another 15 drugs for 2027 and 15 more for 2028. After that, 20 drugs a year will be negotiated for 2029 and beyond.
Negotiations should save Medicare almost $100 billion over the span of 10 years. This savings might trickle down to you, but it depends upon a few factors.
First, you might have large rebates and discounts on these drugs already. For instance, you might be paying only $10 for Jardiance out of pocket, while the negotiations could lead to losing the discount and paying the negotiated price, which might be more than that $10 copay. However, keep in mind that those discounts are usually only good for a certain period of time, such as one year, and then your costs go up to what most people have to pay.
Second, it ensures that you can stay on name-brand drugs rather than trying similar versions of the drug that might not be as effective for you. For instance, someone might react quite favorably to a particular drug but find that the price is too high; in that case, they might try something else, only to find that the new formulation doesn’t help them nearly as much. The negotiations would bring the price of that name-brand drug down enough that it could be affordable as a daily part of your medication regimen.
Third, the Inflation Reduction Act puts a $2,000 cap on annual out-of-pocket costs for prescriptions for Medicare, starting in 2025.
“The number one reason seniors skip or ration their prescriptions is because they can’t afford them,” Nancy LeaMond, the chief advocacy and engagement officer for AARP, told CNN. “Allowing Medicare to negotiate prices for these first 10 drugs will finally bring much-needed access and relief to American families, particularly older adults. We cannot overstate how monumental this law is for older Americans’ financial stability and overall health.”3
The most important part of the negotiations is something you might not see right away, which is the overall savings that Medicare will realize when they are paying much less than they are right now. That savings can be passed on to you through lower premiums and can even reduce the amount of taxpayer support necessary to keep Medicare running smoothly. Those changes in premiums might take some time to show up, but they will.
Will This Actually Happen?
If pharmaceutical companies have their way, there will be no negotiation.
Drug makers are suing the United States government over the law, saying that it is unconstitutional. Most of the drugs on this list are made by companies that are suing the administration in the hopes of stopping the negotiations and keeping the prices where they want them to be.
They argue that the law violates their right to make money from their patents at fair market value, forces them to pay an excessive fine if they don’t negotiate, and even violates their First Amendment rights, as the companies would have to agree to the price dictated by the government and that agreement means they are saying the negotiated price is fair.
However, legal experts thus far seem to agree with the White House in that nothing in the Constitution prevents Medicare from negotiating drug prices as they see fit.
How to Save Money on Senior Health and Safety
While CMS and the drug companies battle it out, remember that your health matters most of all. To that end, it’s time to look into an in-home or mobile GPS alert system for elderly adults. This is a very affordable option to help ensure that seniors stay as safe, healthy, and secure as possible.
The ability to reach out for help at any time, with no charge for button pushes and the certainty that assistance is on the way, can bring significant peace of mind. Let Alert1 Medical Alert Systems be your safety companion as you wait to see what Medicare will manage to negotiate for the medications seniors need.