HHS Releases New Data Showing Over 10 million People with Medicare Received a Free Vaccine Because of the President’s Inflation Reduction Act; Releases Draft Guidance for the Second Cycle of Medicare Drug Price Negotiation Program
Over 10 million people with Part D Medicare received a free vaccine in 2023 thanks to the Inflation Reduction Act, up from just 3 million in 2021.
President Biden’s lower cost prescription drug law, the Inflation Reduction Act, is helping millions of seniors and families save money on health care costs and prescription drugs. The law took on Big Pharma to finally allow Medicare to directly negotiate with participating drug companies for the prices of covered prescription drugs, caps the cost of insulin at $35 for seniors, and makes recommended vaccines free for Medicare Part D enrollees. Today, the U.S. Department of Health and Human Services (HHS) Office of the Assistant Secretary for Planning and Evaluation (ASPE) published a new report showing that in 2023 more than 10 million people with Medicare Part D received a free vaccine thanks to the law – an increase from just 3.4 million people receiving covered vaccines in 2021.
“The President’s lower cost drug law, the Inflation Reduction Act, is improving people’s lives and saving them money,” said HHS Secretary Xavier Becerra. “Free vaccines are life changing and lifesaving for millions of Americans’ health and their wallets. While the ongoing first ever negotiations are making history, we will also make a lasting impact by lowering prescription drug prices for years to come.”
Beginning on January 1, 2023, the Inflation Reduction Act eliminated cost-sharing for all adult vaccines covered under Part D that are recommended by the Advisory Committee on Immunization Practices (ACIP). In 2021, 3.4 million people received vaccines under Part D, and annual out-of-pocket costs were $234 million. Compared to 2021 ASPE vaccine utilization data, the new 2023 data shows sharp increases in vaccine uptake representing millions of dollars in lower out-of-pocket costs for seniors:
- In 2023, a total of approximately 3.9 million Medicare enrollees received a shingles vaccine, compared to about 2.7 million in 2021, an increase of over 42 percent.
- Nearly 1.5 million Medicare enrollees received a Tdap vaccine in 2023, compared to about 700,000 enrollees in 2021, an increase of over 112 percent.
- In addition, RSV vaccines are new and became recommended for adults 60 and older in consultation with their health care provider in June 2023. 6.5 million Medicare Part D enrollees accessed an RSV vaccine free of charge in 2023.
Today the Centers for Medicare & Medicaid Services (CMS) also released draft guidance for public comment on the second cycle of negotiations under the Medicare Drug Price Negotiation Program (Negotiation Program). The negotiations on the first set of 10 prescription drugs are successfully underway, and this second cycle of negotiations will include up to 15 additional drugs selected for negotiation, increasing access to innovative, life-saving treatments for people with Medicare and lowering costs for Medicare and taxpayers. In accordance with the law, CMS will announce up to 15 additional drugs selected for potential negotiation for 2027 by February 1, 2025. This second round of negotiations will occur during 2025, and any negotiated maximum fair prices will be effective for this second set of drugs starting January 1, 2027.
“The first cycle of Medicare negotiations continues to proceed, and CMS is committed to transparency and collaboration throughout the Negotiation Program,” said CMS Administrator Chiquita Brooks-LaSure. “As we look ahead to additional negotiations that will increase access, promote competition and innovation, and lower costs, we continue to engage drug companies and the public as we build on what we are learning in the first cycle of negotiations.”
The Biden-Harris Administration has made lowering prescription drug costs and improving access to innovative therapies a key priority. Today’s draft guidance describes the requirements and parameters for the second cycle of negotiations, which build on policies from the revised guidance for the first cycle of negotiation.
Additionally, CMS is setting forth policies that outline how manufacturers must ensure eligible people in Medicare will have access to the negotiated maximum fair prices for 2026 and 2027, including the procedures that may apply to drug companies, Medicare Part D plans, pharmacies, mail order services, and other dispensing entities that dispense drugs covered under Medicare Part D. CMS will engage with a Medicare Transaction Facilitator (MTF), which will serve as the infrastructure intended to facilitate the exchange of data between pharmaceutical supply chain entities to verify eligibility of an individual who is dispensed a selected drug for its negotiated maximum fair price. CMS is also soliciting comment on options for the MTF to support optional facilitation of retrospective payment from participating drug companies to participating dispensing entities to help effectuate access to the negotiated maximum fair price to people with Medicare prescription drug coverage.
“CMS understands how important these negotiations are for all parties, and we are focused on fostering dynamic dialogue and continuous engagement with stakeholders. Public input is key to achieving the strongest possible implementation of this historic law, which is already lowering health care costs,” said CMS Deputy Administrator and Director of the Center for Medicare Meena Seshamani, MD, PhD.
To allow for public input, CMS is voluntarily seeking comment on this draft guidance for initial price applicability year 2027 and manufacturer effectuation of negotiated maximum fair prices in years 2026 and 2027. The comment period is open for 60 days. Comments received by July 2, 2024, will be considered during the development of final guidance. Since this draft guidance for the second cycle is being released as the first cycle of negotiations is underway, additional learnings may be incorporated into the final guidance that is set for publication later this year.
In addition, today, HHS released new resources in Chinese (traditional), Vietnamese, and Korean, ahead of Asian American, Native Hawaiian, and Pacific Islander Heritage Month. The Inflation Reduction Act postcard explains the basics of the law and how people with Medicare can take advantage of new benefits that may lower their costs. The postcards in these languages, as well as English and Spanish, are available on LowerDrugCosts.gov.
Medicare Drug Price Negotiation Program Draft Guidance (PDF) (May 3, 2024) - https://www.cms.gov/files/document/medicare-drug-price-negotiation-draft-guidance-ipay-2027-and-manufacturer-effectuation-mfp-2026-2027.pdf
Fact Sheet: Medicare Drug Price Negotiation Program Draft Guidance (PDF) (May 3, 2024) - https://www.cms.gov/files/document/fact-sheet-medicare-drug-price-negotiation-program-ipay-2027-and-manufacturer-effectuation-mfp-2026.pdf
For an updated timeline of the Inflation Reduction Act, visit https://www.cms.gov/files/document/10522-inflation-reduction-act-timeline.pdf
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