Biden Floats $2 Co-Pay Limits on Popular Drugs Under Medicare

The Biden administration wants to turn the Medicare Part D prescription drug program into a force for wellness.

The administration has called for requiring Medicare drug plans to limit enrollees’ cost-sharing for anti-cholesterol drugs, drugs that control high blood pressure and other high-value drugs to $2 per prescription.

The administration put that idea in its federal government budget proposal for fiscal year 2025, which starts Oct. 1.

Presidential budget proposals have little direct effect on what the federal government ends up spending or how it changes tax revenues, but putting an attractive provision in a high-profile position in the budget proposal could give it a life of its own.

What it means: Efforts to put a $2 limit on co-payments for some kinds of high-value drugs could soon become as powerful as the forces that led to the Affordable Care Act requiring commercial plans to cover preventive care at no out-of-pocket cost for the patients and Inflation Reduction Act rules requiring government plans to limit monthly cost-sharing for insulin to $35.

Price limits could help some low-income people afford important medications, and they could encourage some middle-income or affluent people to take better care of themselves.

But poorly designed and administered price caps can also lead to shortages of some products, gluts of other products and other market distortions.