Statement from HHS Secretary Xavier Becerra as New $2,000 Out-of-Pocket Cap Takes Effect, Saving Millions on Prescription Drugs

U.S. Department of Health and Human Services (HHS) Secretary Xavier Becerra issued the following statement announcing that the new $2,000 cap on out-of-pocket costs for prescription drugs will be in effect as of January 1, 2025. As part of the Inflation Reduction Act, people with Medicare Part D will pay no more than $2,000 for all their covered prescription drugs for all of 2025.

“Starting January 1, millions of seniors begin saving thousands of dollars on their prescription drugs – thanks to the Inflation Reduction Act’s yearly cap on out-of-pocket prescription drug costs,” said HHS Secretary Xavier Becerra. “This is yet another pivotal milestone in the Biden-Harris Administrations work to lower prescription drug costs for Americans.”

The out-of-pocket drug cap is a major benefit of President Biden’s new lower cost prescription drug law, but it is not the only provision lowering drug costs for people with Medicare. The Inflation Reductions Act caps the cost of insulin at $35 per month for covered insulin products and makes recommended vaccines (like flu, shingles, COVID and RSV) free to everyone with Medicare Part D. The law also allows Medicare, for the first time ever, to negotiate directly with drug companies each year to lower the prices of many of the most expensive and most commonly used prescriptions drugs.  In August, the Biden-Harris Administration completed the first round of price negotiations, resulting in new, lower prices for ten high-cost drugs. Those lower prices ranging from 38 percent to 79 percent off list price will take effect in 2026. In the coming weeks, HHS will select 15 more high-cost drugs for the next round of price negotiations.