September 10, 2024
New law regulating out-of-pocket drug spending saves cancer patients more than $7,000 a year
The Inflation Reduction Act’s limit on Medicare Part D spending leads to significant savings for patients prescribed oral chemotherapy
As prescription oral chemotherapies have become a common form of cancer treatment, some patients were paying more than $10,000 a year for medications.
A study finds that efforts to cap prescription drug spending are yielding significant out-of-pocket savings for these patients.
The Inflation Reduction Act, enacted in 2022, included establishing a cap on out-of-pocket spending for those enrolled in Medicare Part D prescription drug plans.
Researchers from the University of Michigan’s Institute for Healthcare Policy and Innovation and Rogel Cancer Center used the online Medicare Part D Plan Finder tool to assess how much patients were paying for the most commonly prescribed oral chemotherapies.
They compared data from 2023, when no out-of-pocket cap was in place, to 2024, when the policy first took effect.
For Medicare Part D beneficiaries, annual out-of-pocket costs for oral cancer medications averaged $11,284 in 2023.
In 2024, the average annual cost for the same medications is estimated to be $3,927.
The median cost saving from 2023 to 2024 is estimated to be $7,260, demonstrating the policy’s effect on decreasing costs for patients.
The study is published in JAMA Network Open and funded by a Policy Sprint award from IHPI.
“People with cancer are already vulnerable to financial distress and medical debt. Our analysis suggests that legislative policy can have a big impact on the cost of cancer care. This is especially critical as lawmakers now consider extending an out-of-pocket cap to commercial insurance,” said lead study author Benjamin Pockros, M.D., M.B.A., a urology resident at Michigan Medicine.
In 2025, an out-of-pocket cap will be set at $2,000, which the researchers predict will result in even greater savings for patients.
Additional authors: Chad Ellimoottil, M.D.; Belal Sbei; Megan Caram, M.D.; and Kristian Stensland, M.D., M.P.H., M.S. Ellimoottil and Stensland are members of the Dow Division of Health Services Research in the U-M Department of Urology.
Paper cited: “Changes in Out-of-Pocket Spending for Common Oral Cancer Medications After the Inflation Reduction Act,” JAMA Network Open. DOI: 10.1001/jamanetworkopen.2024.32456
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