The bill lowers Medicare Part D beneficiaries' out-of-pocket drug costs and aligns cost-sharing with real net prices, but it may shift costs onto plans or taxpayers and prompt plan-side changes that could limit access, with some operational lag risk from using prior-year pricing data.
Medicare Part D enrollees (including those reaching catastrophic phase) will pay lower out-of-pocket coinsurance when a drug's actual acquisition cost is below the list WAC, reducing direct spending between the deductible and the out-of-pocket threshold.
Patients with ongoing medication needs (e.g., chronic conditions) will face improved affordability during accumulation toward the catastrophic phase because beneficiary cost-sharing will more closely reflect negotiated net prices.
The change promotes greater alignment and transparency between plan-reported net prices and beneficiary cost-sharing, reducing incentives to use higher WAC for coinsurance calculations and making pricing mechanics more consistent.
Taxpayers and Medicare plans may indirectly bear higher costs because lower beneficiary cost-sharing could reduce plan-collected contributions and lead to higher plan liabilities or increased premiums subsidized by taxpayers.
Medicare Part D plans may respond to reduced coinsurance revenue by changing formularies, negotiation strategies, or benefit designs (e.g., higher premiums, prior authorization), which could complicate or restrict patient access to some drugs.
Using prior-year Detailed DIR reports to set actual acquisition cost risks temporary mismatches with current market prices, causing short-term inaccuracies in beneficiary coinsurance calculations.
Based on analysis of 2 sections of legislative text.
Requires Part D plans to use a drug’s actual acquisition cost (net of manufacturer concessions) instead of WAC for coinsurance when the actual cost is lower, starting 2026.
Introduced February 12, 2025 by Don Davis · Last progress February 12, 2025
Requires Medicare Part D plans to compute coinsurance for formulary drugs (for plan years starting on or after January 1, 2026) using the drug’s actual acquisition cost — defined as the plan’s negotiated price after manufacturer price concessions — when that amount is lower than the wholesale acquisition cost. The rule excludes drugs already excluded under existing statutory paragraphs and relies on the sponsor’s prior-year Detailed DIR Report to define the actual acquisition cost.