Landmark bill to cut prescription drug prices signed into law

President Joe Biden signed the Inflation Reduction Act of 2022 on Aug. 16. This historic legislation will help millions of Medicare enrollees better afford their life-sustaining medications,

and millions more Americans will be able to pay their Affordable Care Act premiums. "This law finally delivers on a promise that was made for decades to the American people,"

allowing Medicare to negotiate prescription drug prices, said Biden, who was flanked by several senators and House members and an audience that included cabinet secretaries, staff and

supporters in the State Dining Room at the White House. Because of this law, Biden said, "seniors are going to pay less for their prescription drugs" and "13 million people

are going to continue to save an average of $800 a year on health insurance" because the law extends expanded subsidies on ACA policies. With most lawmakers away from Washington, D.C.

on an August recess, a celebratory signing ceremony has been scheduled for Sept. 6 at the White House. In addition to its health care components, the sweeping law includes some elements of

Biden’s Build Back Better initiative, including investments in energy and climate solutions, and makes a number of corporate tax law changes. "AARP has fought hard to lower prescription

drug prices for decades," AARP CEO Jo Ann Jenkins said in a statement after the bill signing. "This is one of the most important pocketbook issues for older Americans — across

political aisles and across the country. We have made our voice loud and clear: Drug prices have been out of control, and enough is enough." The new law passed the U.S. Senate on Aug. 7

in a 51–50 vote, with Vice President Kamala Harris breaking the tie. The measure then cleared the House 220–207 on Aug. 12. We have made our voices loud and clear: Drug prices have been out

of control, and enough is enough. — Jo Ann Jenkins, AARP CEO The Inflation Reduction Act for the first time authorizes Medicare to negotiate the prices of some high-cost prescription drugs

with pharmaceutical companies, puts an annual $2,000 limit on how much Part D prescription drug plan members will have to pay out of pocket for their medications, and levies tax penalties

on drugmakers that increase product prices by more than the rate of inflation. The new law also caps the cost of Medicare-covered insulin at $35 a month and eliminates out-of-pocket costs

for most vaccines under Medicare. Medicare saves hundreds of billions of dollars over 10 years as a result of the new law, with the majority of the savings coming as a result of prescription

drug price negotiations and the rebates to Medicare designed to encourage pharmaceutical companies to keep price increases to no more than the rate of inflation, according to an analysis by

the nonpartisan Congressional Budget Office. That means beneficiaries will be able to get the same medications they do now, but some of those drugs will cost them, and Medicare, less. The

savings will not be the result of any cuts to the Medicare program.