Inflation Reduction Act provides prescription drug relief for Florida Medicare beneficiaries
Over 4.8 million Floridians enrolled in Medicare will benefit from new prescription drug pricing policies from the federal Inflation Reduction Act of 2022. President Biden signed the $750 billion bill into law on Tuesday, ensuring lower prescription drug prices, capping insulin copays to $35 per month, and providing continuous health coverage through subsidies.
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“Florida seniors, and seniors across the country are facing real challenges when it comes to affording their prescription drugs on a monthly basis,” Zayne Smith, Director of Advocacy at AARP Florida told State of Reform. “They’re really having to deal with all these costs of living increases that you see across the board, whether it be for housing, for utilities, for groceries or gas, and then prescription drugs are right there, lumped in. [AARP has] been fighting for years to find ways in which we can give some sort of break for people who depend on prescription drugs.”
Drug prices in the US are 2 to 3 times more expensive than in other countries, according to a July analysis from the Office of the Assistant Secretary for Planning an Evaluation. One of the act’s main provisions is allowing Medicare to negotiate prescription drug pricing for high-cost drugs. The act would also cap annual out-of-pocket drug costs in Medicare Part D at $2,000 starting in 2025, which would bring savings to over 113,000 Floridians who would otherwise have expenses above the cap, according to estimates from the Kaiser Family Foundation.
A couple of provisions from the act will take effect much sooner, by the beginning of next year. First is providing certain vaccines to Medicare beneficiaries for free, such as the shingles vaccine, which Smith says costs on average $350 out-of-pocket. The second is capping out-of-pocket insulin copays at $35 a month, although this provision is also limited to Medicare beneficiaries. As of 2020, an estimated 232,000 Florida Medicare enrollees used insulin.
Another unique provision, Smith said, was that drug companies can now be penalized for raising drug prices above the rate of inflation.
“All sorts of different prescription drugs toward the end of the year skyrocket in price, but yet inflation is skyrocketing as well,” Smith said. “That costs people, once again, across the board. The gas is going up, prescription drugs are going up. So this is going to now penalize these drug companies for doing these huge increases higher than the rate of inflation. That’s going to be a savings that’s immediately recognized and received by Medicare recipients.”
Despite the act’s provisions, AARP Florida believes more can be done to continue lowering prescription drug prices for Floridians. For example, the insulin cap was meant to apply more broadly across the board, but through the amendment process was limited to Medicare recipients. According to Smith, individuals will often compromise buying groceries or house utilities so they can afford insulin costs.
Florida is still waiting on federal approval for its Canadian Prescription Drug Importation Program, which the state legislature first passed in 2019. The program would allow the Agency for Health Care Administration to import certain drugs from Canada that would treat chronic health conditions such as asthma, COPD, diabetes, and HIV/AIDS.
“Savings are literally hanging before us as soon as we get this approval, but implementation would be the key,’ Smith said. “The state of Florida has been planning for that for 3 years now and waiting to get that green light. We’ve got the money, it’s been appropriated. The players are in place, we’ve just got to get the green light to do it as a state.”