A new law officially kicked in this week to begin lowering prescription drug costs across the United States.
Today, U.S. Senator Jack Reed highlighted that several provisions of the Inflation Reduction Act (Public Law 117-169) are now in effect and cutting costs for Rhode Islanders. Reed helped pass the law in August.
Senator Reed pointed to free vaccines for seniors on Medicare and other Medicare improvements along with a $35 monthly cap on the cost of insulin for Medicare recipients among the measures that will help Americans nationwide achieve real savings.
“I helped pass the Inflation Reduction Act to help Rhode Islanders stay healthy, reduce out of pocket costs, create new jobs, and ensure a more secure and stable economy and environment. As the law begins to take effect, it will provide real savings and benefits for Rhode Islanders, particularly seniors, who are already seeing a cap on insulin copays, free vaccines, lower premiums, and more,” said Senator Reed. “This new law will be a big help to Rhode Islanders. But we still have a long way to go to keep Big Pharma in check and bring down the runaway cost of prescription drugs.”
Thanks to the new law, approved vaccines under Medicare Part D are now free, which will help an estimated 15,000 Rhode Islanders and over 4 million American seniors nationwide.
About 3.3 million people with Medicare rely on one or more insulin products to control blood sugar levels, according to the Kaiser Family Foundation. And a Yale University study found that 14 percent of the roughly 7 million Americans who require daily insulin use spend upwards of 40 percent of their income after food and housing on insulin.
According to the American Diabetes Association: Taking less than the prescribed amount of insulin can lead to uncontrolled glucose levels causing damage to parts of the body such as the eyes, kidneys, or heart. Without enough insulin, a condition called diabetic ketoacidosis can occur. If untreated, it can be fatal. Even if a person is not rationing their insulin, it doesn’t mean that the costs aren’t burdensome. The cost can still affect a person’s life in other significant ways, a person with diabetes may not be able to pay rent or their mortgage because they have to buy insulin, or they may not be able to buy groceries or other medications they require. More than 100,000 people have diabetes in Rhode Island, and 5,000 more are diagnosed each year.
The following Inflation Reduction Act provisions are now in effect:
Insulin capped at $35 a month for seniors on Medicare.
All vaccines will be free for seniors on Medicare. With this provision implemented, nearly 9 out of 10 of Americans will have access to vaccines with no out-of-pocket costs.
Prescription drug rebates are in effect for Medicare.
Penalties on drug manufacturers that increase prices: Manufacturers are now required to keep the increase in the cost of their drugs at or below inflation.
April 1, 2023: Medicare recipients may pay a lower coinsurance for some Part B drugs if the drug’s price increased faster than the rate of inflation in a benchmark quarter.
September 1, 2023: CMS will announce the first 10 Medicare Part D drugs selected for the Drug Price Negotiation Program. Maximum fair prices negotiated for these first 10 Part D drugs will go into effect in 2026.
October 1, 2023: Medicaid and CHIP will cover vaccines for all Medicaid-covered adults. Currently, vaccine coverage is optional for states.
2024 and 2025 will see the additional phase-in of initiatives to lower prescription drug costs and strengthen coverage, including measures to stabilize premium increases and limit out-of-pocket prescription drug costs to $2,000 for people with Medicare Part D.
January 1, 2026: People will start to benefit from Medicare’s new powers to negotiate directly with Big Pharma for lower drug prices.
President Biden signed the Inflation Reduction Act into law on August 16, 2022. In addition to lowering health costs, the landmark law invests in clean energy and addressing climate change, creates good-paying jobs, and incentivizes domestic manufacturing while fighting inflation and reducing the deficit.
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