Even for patients covered by Medicare, annual out-of-pocket costs for lifesaving cancer treatments taken in pill form have often exceeded $10,000—until recently. Thanks to changes in Medicare Part D introduced by the Inflation Reduction Act (IRA) that took effect in 2025, annual out-of-pocket drug costs for all beneficiaries are now capped at $2,000. However, an overlooked voluntary program that’s part of the IRA could be the key to improving affordability for Medicare patients needing expensive oral cancer drugs, according to a new study from researchers from the Perelman School of Medicine at the University of Pennsylvania published today in JCO Oncology Practice.
“High out-of-pocket costs often put these critical medicines out of reach and can lead to patients abandoning treatment,” said study lead author Jalpa Doshi, Ph.D., Leon Hess Professor in Internal Medicine and Senior Fellow at the Leonard Davis Institute of Health Economics. “The annual out-of-pocket maximum and MPPP together make it possible for Medicare Part D beneficiaries to greatly reduce these costs, on an annual and monthly basis.”
High out-of-pocket costs can lead to abandoned treatments, but recent policy changes can help
Researchers calculated Medicare patient out-of-pocket costs for cancer drugs taken orally under different scenarios:
- The standard Medicare Part D benefit prior to any changes
- The new annual Part D out-of-pocket maximum introduced by the IRA; and
- The annual out-of-pocket maximum plus patient enrollment in the voluntary Medicare Prescription Payment Plan (MPPP) that permits patients to spread out-of-pocket costs throughout the year in monthly payments.
They showed that before the IRA was implemented, annual out-of-pocket costs for an oral cancer drug could run more than $11,000, much of that due early in the year, whereas in 2025 the IRA would limit these costs to $2,000 annually. MPPP enrollment in January would allow this annual total to be spread across 12 monthly payments, each $167.
Medications for high-prevalence cancers were among those examined
Doshi and her colleagues estimated how these policy changes would impact out-of-pocket costs for 10 popular brand-name specialty oral cancer medications. The medications include drugs commonly used for a variety of cancers by tens of thousands of Medicare patients per year to safely and effectively treat their disease.
Before the IRA’s changes took effect, Medicare patients did not have a cap on the amount of out-of-pocket costs they could expect to pay in a given year. Under the standard Medicare Part D benefit in 2023, patients faced a $505 deductible, 25% coinsurance until reaching the catastrophic coverage threshold, and thereafter 5% coinsurance for the remainder of the calendar year.
The patient cost sharing requirements under Medicare Part D combined with the high monthly price for these drugs resulted in extremely high annual out-of-pocket costs. The lowest was $11,143 for enzalutamide, used to treat prostate cancer. The highest was $20,592 for the combination regimen dabrafenib/trametinib, used to treat certain types of melanomas and thyroid cancers. A large part of these huge out-of-pocket costs had to be borne in the first months of the year when the deductible and 25% coinsurance rate still applied.
The IRA was meant to alleviate this burden for Medicare Part D beneficiaries, and it did, limiting out-of-pocket costs for these drugs to $2,000 annually as of its full implementation in 2025, representing a reduction of 82% to 90% for the ten drugs studied. However, the entirety of the $2,000 annual out-of-pocket cost maximum would come due for the first prescription filled in January for each of the ten drugs. Prior research by the same team has shown that when faced with such high upfront costs, 42% of Medicare beneficiaries stopped taking their oral cancer treatments, which could lead to their cancer growing or coming back.
Charting a new path forward
Fortunately, under the MPPP—a new voluntary program based on ideas first proposed by Doshi and her team at Penn—Medicare Part D beneficiaries can spread their out-of-pocket costs in monthly payments over a calendar year starting 2025. Thus, for those who chose to enroll in the MPPP in January, costs for each of the ten drugs would be reduced to about $167 per month (i.e., $2,000 spread across 12 monthly payments).
“Timing is everything—patients who enroll early in the year will benefit the most since they will have more months to spread the payments,” Doshi said. “Oncology providers have a critical role to play in ensuring that Medicare patients to whom they prescribe expensive oral cancer medications are aware of the MPPP and the benefits of early enrollment in the year.”
More information:
Jalpa A. Doshi et al, Reducing Medicare Part D Out-of-Pocket Costs for Specialty Oral Anticancer Drugs Under the Inflation Reduction Act: Highlighting the Benefits of Enrolling in the Medicare Prescription Payment Plan, JCO Oncology Practice (2025). DOI: 10.1200/OP-24-00937
Citation:
New Medicare program could dramatically improve affordability for cancer drugs—if patients enroll (2025, April 26)
retrieved 26 April 2025
from https://medicalxpress.com/news/2025-04-medicare-cancer-drugs-patients-enroll.html
This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no
part may be reproduced without the written permission. The content is provided for information purposes only.
Even for patients covered by Medicare, annual out-of-pocket costs for lifesaving cancer treatments taken in pill form have often exceeded $10,000—until recently. Thanks to changes in Medicare Part D introduced by the Inflation Reduction Act (IRA) that took effect in 2025, annual out-of-pocket drug costs for all beneficiaries are now capped at $2,000. However, an overlooked voluntary program that’s part of the IRA could be the key to improving affordability for Medicare patients needing expensive oral cancer drugs, according to a new study from researchers from the Perelman School of Medicine at the University of Pennsylvania published today in JCO Oncology Practice.
“High out-of-pocket costs often put these critical medicines out of reach and can lead to patients abandoning treatment,” said study lead author Jalpa Doshi, Ph.D., Leon Hess Professor in Internal Medicine and Senior Fellow at the Leonard Davis Institute of Health Economics. “The annual out-of-pocket maximum and MPPP together make it possible for Medicare Part D beneficiaries to greatly reduce these costs, on an annual and monthly basis.”
High out-of-pocket costs can lead to abandoned treatments, but recent policy changes can help
Researchers calculated Medicare patient out-of-pocket costs for cancer drugs taken orally under different scenarios:
- The standard Medicare Part D benefit prior to any changes
- The new annual Part D out-of-pocket maximum introduced by the IRA; and
- The annual out-of-pocket maximum plus patient enrollment in the voluntary Medicare Prescription Payment Plan (MPPP) that permits patients to spread out-of-pocket costs throughout the year in monthly payments.
They showed that before the IRA was implemented, annual out-of-pocket costs for an oral cancer drug could run more than $11,000, much of that due early in the year, whereas in 2025 the IRA would limit these costs to $2,000 annually. MPPP enrollment in January would allow this annual total to be spread across 12 monthly payments, each $167.
Medications for high-prevalence cancers were among those examined
Doshi and her colleagues estimated how these policy changes would impact out-of-pocket costs for 10 popular brand-name specialty oral cancer medications. The medications include drugs commonly used for a variety of cancers by tens of thousands of Medicare patients per year to safely and effectively treat their disease.
Before the IRA’s changes took effect, Medicare patients did not have a cap on the amount of out-of-pocket costs they could expect to pay in a given year. Under the standard Medicare Part D benefit in 2023, patients faced a $505 deductible, 25% coinsurance until reaching the catastrophic coverage threshold, and thereafter 5% coinsurance for the remainder of the calendar year.
The patient cost sharing requirements under Medicare Part D combined with the high monthly price for these drugs resulted in extremely high annual out-of-pocket costs. The lowest was $11,143 for enzalutamide, used to treat prostate cancer. The highest was $20,592 for the combination regimen dabrafenib/trametinib, used to treat certain types of melanomas and thyroid cancers. A large part of these huge out-of-pocket costs had to be borne in the first months of the year when the deductible and 25% coinsurance rate still applied.
The IRA was meant to alleviate this burden for Medicare Part D beneficiaries, and it did, limiting out-of-pocket costs for these drugs to $2,000 annually as of its full implementation in 2025, representing a reduction of 82% to 90% for the ten drugs studied. However, the entirety of the $2,000 annual out-of-pocket cost maximum would come due for the first prescription filled in January for each of the ten drugs. Prior research by the same team has shown that when faced with such high upfront costs, 42% of Medicare beneficiaries stopped taking their oral cancer treatments, which could lead to their cancer growing or coming back.
Charting a new path forward
Fortunately, under the MPPP—a new voluntary program based on ideas first proposed by Doshi and her team at Penn—Medicare Part D beneficiaries can spread their out-of-pocket costs in monthly payments over a calendar year starting 2025. Thus, for those who chose to enroll in the MPPP in January, costs for each of the ten drugs would be reduced to about $167 per month (i.e., $2,000 spread across 12 monthly payments).
“Timing is everything—patients who enroll early in the year will benefit the most since they will have more months to spread the payments,” Doshi said. “Oncology providers have a critical role to play in ensuring that Medicare patients to whom they prescribe expensive oral cancer medications are aware of the MPPP and the benefits of early enrollment in the year.”
More information:
Jalpa A. Doshi et al, Reducing Medicare Part D Out-of-Pocket Costs for Specialty Oral Anticancer Drugs Under the Inflation Reduction Act: Highlighting the Benefits of Enrolling in the Medicare Prescription Payment Plan, JCO Oncology Practice (2025). DOI: 10.1200/OP-24-00937
Citation:
New Medicare program could dramatically improve affordability for cancer drugs—if patients enroll (2025, April 26)
retrieved 26 April 2025
from https://medicalxpress.com/news/2025-04-medicare-cancer-drugs-patients-enroll.html
This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no
part may be reproduced without the written permission. The content is provided for information purposes only.
