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Greenville Business Magazine

New Law Will Help Make Prescription Drugs More Affordable

Jan 27, 2023 02:42PM ● By Liv Osby

When the pharmacy clerk told her the medication her doctor had just prescribed would cost nearly $700, Debra Coleman was dumbstruck.

“I was almost in tears. I could not afford that,” said the retired educator. “I walked out without the drug.” 

But with the passage of the federal Inflation Reduction Act in August, the Greenwood woman has hope that the price of prescription drugs will be more affordable soon.

The law includes provisions to lower the cost of medications for millions of Americans on Medicare, many of whom struggle to pay for them.

The U.S. Centers for Medicare and Medicaid Services reports that almost 64 million Americans were enrolled in Medicare as of October 2021 – nearly 50 million of them with Part D plans, which cover prescription drugs.  

And more than 5 million of them had trouble affording their medications, sometimes skipping them because of the cost

According to The Commonwealth Fund, a private foundation that supports independent research about health care issues, Americans spend twice as much on prescription drugs as other comparable Western nations – more than any other country in the world – with one in four people saying they have trouble affording their medications.

“Even people with good health insurance are concerned,” the group reported in 2018, “… some people can’t afford the copays and deductibles for their medications.”

Charmaine Fuller Cooper, director of the South Carolina chapter of AARP, said it’s tough for many seniors on fixed incomes to pay for routine prescriptions. But some drugs can cost thousands, even tens of thousands of dollars, she said. 

For example, in 2020 the average spending per Medicare beneficiary for the blood thinner Eliquis was $3,700, and it was more than $4,000 for the diabetes drug Januvia, she said. It was upwards of $34,000 for the arthritis drug Orencia and $74,000 for the cancer drug Xtandi, she said.

“There are a lot of people who are … not going to get the medications they need,” she said. “There’s just no way you can afford it.”

Among the new law’s provisions is an annual cap of $2,000 on out-of-pocket spending for Part D prescriptions starting in 2025.

And Part D premiums won’t increase more than 6 percent a year through at least 2029, according to AARP.

The law also caps the cost of insulin for Medicare beneficiaries at $35 a month beginning in 2023, which is a huge help for diabetics, Fuller Cooper said.

“We know that insulin costs are a huge pocket-cruncher. And being able to afford your medications is one key component of staying healthy,” she said, noting that uncontrolled diabetes can result in amputations and other serious conditions. 

The law also empowers the U.S. Department of Health and Human Services to begin to negotiate the price of 10 high-cost prescriptions in 2023, with those prices taking effect in 2026 and the number of drugs increasing annually to 20 by 2029, the group reports.

In addition, Fuller Cooper said, drug companies can’t increase their prices more than the rate of inflation or they’ll have to rebate the difference to Medicare. That took effect in October, she said.

“So if inflation is 6 percent and a company is charging 8 percent, 2 percent will go back to the government,” she said.

The law also includes a provision that most vaccines will be free for Medicare beneficiaries starting in 2024.

That comes as good news to Coleman, who said she can’t afford the $150 for the Shingrix vaccine.

“I don’t have that kind of extra money,” she said. “That would (impact) what I could spend on other things, like food and gas. I’m already waiting once a week to get my T-Mobile Boost for 10 cents off per gallon.”

Under the new law, it will also be easier to qualify for subsidies to help pay for out-of-pocket medication costs, AARP reports.

It also includes a three-year extension of federal premium subsidies for people who get their insurance through Affordable Care Act plans. That, according to AARP, is important to people between 50 and 64 who pay higher premiums than younger people.

The trade group representing drug makers – the Pharmaceutical Research and Manufacturers of America – said the law will result in fewer new treatments because there will be less money to spend on research and development. 

“We have long supported some provisions in the law, like capping seniors’ out-of-pocket costs at $2,000 a year and spreading out their costs throughout the calendar year, but ultimately the law will do more harm than good,” PhRMA spokeswoman Sarah Ryan said in a statement.

“It threatens the choice and access seniors have enjoyed, doesn’t address the role insurers and middlemen play in determining what people pay at the pharmacy, and it’s already impacting the development of new treatments,” she added. 

“We’re going to work mitigate the harm from this law and continue to push for meaningful changes that will make medicines affordable for all patients.”

Since 2000, the group reports, PhRMA companies have invested more than $1.1 trillion on researching and developing new treatments.

But AARP, which has been advocating for lower drug prices for years, called the new law a “historic victory.”

“Lowering prescription drug prices is a top priority for Americans, with more than 80 percent of people from both political parties supporting the measure,” AARP CEO Jo Ann Jenkins said in a statement. 

Over the past three years, AARP has organized petition, email and phone call drives from older Americans to their Congressional representatives to advocate for lower drug prices, officials said.

“Together, we made Congress understand what outrageously high drug prices mean for the millions of Americans who are forced to choose between paying for the medicine they need and everyday expenses like gas and groceries,” Jenkins said. 

“AARP will keep fighting to get Americans relief from the high price of prescription drugs.” 

Fuller Cooper also credited older Americans turning out at events to press lawmakers about the high cost of medications for making the law a reality.

“I’m super excited about the advocacy of our members and seniors in South Carolina and beyond,” she said. “This is their win.” 

Coleman, 68, said she considers herself lucky that she has no other major health issues, and adds that she’s thrilled the new law was passed. 

“I think it’s wonderful. It’s the first thing that came across my mind when I was standing in line at (the pharmacy),” she said. “It was like balloons going up.”

Cynthia Roddey of Catawba says she’s on a variety of medications, like inhalers for her asthma, but so far has been able to afford her out-of-pocket costs thanks to a good insurance plan.

But the 83-year-old widow and retired teacher says she worries what might happen if she has to have surgery or develops a serious illness.

“I’m spending about $2,000 a year on drugs. I never meet my deductible of $3,500,” she said. 

“(But) it has limited the funds I have for things like travel – I haven’t been able to go anyplace – and getting my car repaired when it needs to be,” she added. “I even asked to put (heating) oil on layaway. It costs $1,000 to fill up my tank.” 

So what does she think of the new law? 

“It’s great,” she said. “Especially for people who have asthma and diabetes. One (prescription) can be $400."

Fuller Cooper said the new law will go a long way to help many seniors who go without their medicines or split pills or take them every other day because of the cost.  

“I’ve seen studies in the past where people wouldn’t even have a few hundred dollars in their pocket if they had an emergency … so they can’t afford the cost of these medications,” she said. “The (law) has many components to lower prescription drug prices to help save the pocket books of seniors.”