The federal agency that oversees Medicare just announced a proposed initiative that could lead to a large number of generic prescription drugs costing older Americans just $2 per refill as soon as 2027.
The proposal, for a model program that Part D prescription drug plans offered by commercial insurers could participate in, is accepting public comments through early December
One of the experts whose research and expertise helped inform the proposed model’s development is A. Mark Fendrick, M.D., a health care costs researcher and physician at Michigan Medicine, the University of Michigan’s academic medical center. He sees patients as a general internist at U-M Health and directs the U-M Center for Value-Based Insurance Design.
Fendrick is available to comment on the concepts behind the proposal, and what the impact might be on the millions of older and disabled Americans who choose Part D coverage each year. He can also comment on other aspects of drug cost policy in Medicare, including programs that will take effect in the 2025 coverage year, and the drug price negotiation process that will take effect in 2026.
He said: “While lots of more attention is being paid to the first-ever Medicare drug price negotiations for a small number of prescription medications, the Medicare $2 Drug List Model, and other elements of the Inflation Reduction Act that lower out of pocket spending on drugs, will impact nearly every Medicare beneficiary.
“Programs that begin next year – mainly the $2,000 annual out of pocket cap for drugs covered by a person’s Part D plan, and the cost-smoothing Medicare Prescription Payment Plan — could save participants several billions of dollars each year and help them avoid cost ‘spikes’ when filling their prescriptions. In fact, the savings from the cap could save the Medicare population more than three times what price negotiation might save in their initial years.”
He notes that the public comment period includes a chance to comment on the specific drugs on the proposed list of generic medications for which Part D plans could charge $2 per refill if they opt to participate in the model.
“Over 95% of seniors with drug coverage take at least one of the 101 drugs on the proposed list,” said Fendrick. “And we know that Americans do not care about overall drug costs, they care about what it costs them at the pharmacy counter.”
Research from the V-BID Center and other investigators has demonstrated that efforts to lower out of pocket drug costs increase seniors’ likelihood of taking their medications as directed, while reducing healthcare disparities and improving patient outcomes.
