New Medicare program could dramatically improve affordability for cancer drugs–if patients enroll
An analysis by experts at Penn Medicine finds the Medicare Prescription Payment Plan could help patients avoid large out-of-pocket payments for their first oral cancer prescription.
2 min. read
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, published in JCO Oncology Practice.
“High out-of-pocket costs often put these critical medicines out of reach and can lead to patients abandoning treatment,” says study lead author Jalpa Doshi, 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.”
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 that permits patients to spread out-of-pocket costs throughout the year in monthly payments.
Doshi and her colleagues estimate 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.
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 10 drugs would be reduced to about $167 per month (i.e., $2,000 spread across 12 monthly payments).
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