Lower drug prices make Medicare more affordable

The ability to afford necessary medicines is about dignity, hope, and justice. These words were at the heart of our work at the U.S. Department of Health and Human Services in implementing the Inflation Reduction Act, which also lowers the cost of prescription drugs.

We are building a future in which people do not have to go without necessary medicines because they are too expensive.

The law caps the cost of each Medicare-covered insulin product at $35 per month and makes recommended vaccinations covered under Part D—such as those against shingles, RSV, and Tdap—free for Medicare beneficiaries.

For our friends and family with diseases like cancer, a single medication can cost thousands of dollars. Before this law to lower prescription drug costs was enacted, some people had to pay tens of thousands of dollars each year for these drugs. But this year, prescription drug out-of-pocket costs were capped at about $3,500 for 1.1 million Texans with Medicare Part D who have high drug costs; in total, this is expected to result in more than $258 million in savings for the Medicare program. And next year, it will be even better when drug costs will be capped at $2,000 for everyone with Medicare out-of-pocket costs.

A historic milestone was reached earlier this month when HHS announced new, lower prices for ten drugs selected for the first cycle of Medicare drug price negotiations.

As acting regional director of HHS, part of my job is to promote the new benefits of the Inflation Reduction Act. In my travels throughout Texas, I have spoken with countless people who were shocked to learn that until now, the Medicare program was prohibited from negotiating directly with drug companies on behalf of its insured members.

But the Lower Prescription Drug Prices Act lifted that ban, paving the way for lower prices for insured people and securing the promise of Medicare for our children and grandchildren. Last year, we announced the 10 drugs selected for the first round of negotiations. They included expensive, life-saving drugs like Eliquis, a drug to prevent blood clots, and Januvia, a drug to treat type 2 diabetes.

In total, about nine million Medicare beneficiaries will have taken one or more of the 10 selected drugs in 2023, costing taxpayers over $56 billion. In Texas, more than 623,000 Medicare beneficiaries will be taking one or more of the 10 selected drugs. We are finally doing something to reduce these costs.

On August 15, the administration announced the new, lower prices agreed to by HHS and the pharmaceutical companies involved. These new, lower prices will go into effect on January 1, 2026, ushering in a new era of savings for people with Medicare and the Medicare program. Had these prices gone into effect in 2023, they would have saved Medicare an estimated $6 billion, or 22% of what Medicare spent on these drugs. That's money saved for taxpayers and working families.

This is just the beginning. Under the law, additional drugs will be selected for negotiation each year, potentially benefitting even more seniors and people with disabilities with Medicare and saving taxpayers even more money. For more information on the drugs selected for negotiation and the new prices, visit LowerDrugCosts.gov or MedicamentosBajoPrecio.gov.

While this month's milestones are cause for celebration, I remain focused on ensuring that all Texas residents can stay healthy and thrive in their community without having to choose between paying their bills and maintaining their health.

Julia Lothrop is the U.S. Department of Health and Human Services’ acting regional director for Arkansas, Louisiana, Oklahoma, Texas, and 68 federally recognized tribes.

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