Drug prices to be capped at $2,000 for millions of Medicare recipients starting in 2025

RICHMOND, Va. (WRIC) — Millions of Medicare recipients will save thousands on prescription medicine starting at the beginning of next year.

As part of the Biden Administration’s Inflation Reduction Act , which was signed into law in 2022, a $2,000 out-of-pocket cap will help reduce the prices of 10 commonly-used drugs starting in 2025.

The American Association of Retired Persons (AARP) released a report which shows that 66,617 Virginians on Medicare prescription drug plans will save money next year. AARP State Director Jim Dau said this will help those struggling to make ends meet.

“There are many more that are paying $5,000 a year, $10,000 a year, even out of pocket,” Dau said. “It’s important for the rest of Virginians who receive their prescription drug coverage through Medicare.”

The report also analyzed the number of people who will benefit from the cap by state, age, gender and race between 2025 and 2029. The findings indicate that Medicare drug plan enrollees who qualify will see average savings of around $1,500 in 2025. The report also found the number of Virginians who benefit will grow to more than 86,000 by 2029.

Dau said spending increases driven by high and growing drug prices have affected many Americans and have outpaced inflation, according to a study from 2006 to 2020 .

Prescription drugs are the poster child for runaway inflation,” Dau said. “What our study found is, if the cost of a gallon of milk rose as fast as the average prescription drug, a gallon of milk would cost $13 a gallon, the cost of going to the movies would be $24.30 and the cost of an average unleaded regular gallon of gas would be $12.20. Can you imagine if we had to spend $12.20 per gallon of gas?”

Senior Connections, which provides advocacy and referrals for adults and persons with disabilities in the Richmond area, helps more than 3,000 Medicare enrollees a year make the best choice for prescription medical drugs.

Senior Connections Executive Director Amy Strite said this act will help ease the burden for those choosing between affording medicine and cost of living.

“Time and time again, we hear from people who are really concerned about how they’re going to pay for their bills, whether that’s housing, certainly medical care, food,” Strite said. “By having support around medication coverage, it will really give some relief and allow people to focus in other areas.”

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