New law regulating out-of-pocket drug spending saves cancer patients more than $7,000 a year

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.

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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.

“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.; Kristian Stensland, M.D., M.P.H., M.S.

Funding: University of Michigan Institute for Healthcare Policy and Innovation.

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