Inflation Reduction Act Caps Annual Out-of-Pocket Prescription Costs at $2,000 and Monthly Insulin at $35 Under Medicare

Above: Gottheimer in Glen Rock to highlight progress made to lower the cost of prescription drugs and insulin.

GLEN ROCK, NJ — Today, August 31, 2022, at Rock Ridge Pharmacy, U.S. Congressman Josh Gottheimer (NJ-5) announced new progress made in the fight to lower the cost of prescription drugs, particularly for the price of insulin, through the Inflation Reduction Act — a great win for making life more affordable for North Jersey families and small businesses. Beginning in 2023, the Inflation Reduction Act will cap the cost of insulin under Medicare at $35 per month for 5,700 residents from the Fifth District and more than 77,000 residents across New Jersey. This applies to all Medicare beneficiaries, even those who have not met their deductible. 

Currently, insulin can cost up to $300 a vial and most people with diabetes need two to three vials per month. Nearly ten percent of Fifth District adults have been diagnosed with diabetes. From 2014 to 2019, the price of insulin rose by 54%, and due to the incredibly high price of insulin, roughly a quarter of diabetic patients skimp or even skip doses altogether — a last resort that can have fatal consequences. 34 million American adults and more than 200,000 children live with diabetes.

If the drug pricing provisions from the Inflation Reduction Act were in place during 2020, the total cost of prescriptions filled by Fifth District residents under Medicare could have been $43 million lower. Savings would have totaled to $13 million in reduced out-of-pocket and premium costs.

“Can you imagine a parent having to ration their children’s lifesaving insulin, or a grandparent not having enough in their pocketbook for their grandchild’s birthday gift because the cost of insulin has bankrupted them? It’s heartbreaking and unacceptable,” said Congressman Josh Gottheimer (NJ-5). “That’s why, after far too long, we’ve now taken action in Congress to pass the Inflation Reduction Act and get it signed into law — to lower prescription drug prices, especially for seniors; cap annual out-of-pocket prescription costs at $2,000 under Medicare, cap the cost of insulin at $35-per-month for Medicare beneficiaries, and provide support for families struggling with the high cost of health insurance. I’m calling on the Senate to immediately pass this bipartisan Affordable Insulin Now Act, so that all those on private health insurance, regardless of their age, can also benefit from a $35-per-month insulin cap.”

“Thank you for your dedication to making sure insulin is affordable. I can tell you firsthand that insulin is not affordable for all. These are the reasons why people are making the choice to pay for their rent or pay for their medication, and this should not be a choice,” said Ginine Cilenti, Executive Director of the Diabetes Foundation.  

“Thank you, Congressman Gottheimer, for your support for this law that will help people with diabetes. Capping the cost of insulin at $35-per-month is critical for affordability. We have heard too many stories of people who have not been able to afford their insulin, so they give up their food or skip meals,” said Lily Scarlett, Associate Director of Development, Greater NY/NJ, of the American Diabetes Association.

Gottheimer was joined today at Rock Ridge Pharmacy in Glen Rock by Bergen County Commissioner Tom Sullivan, Executive Director of the Diabetes Foundation Ginine Cilenti, Associate Director of Development, Greater NY/NJ, of the American Diabetes Association Lily Scarlett, Rock Ridge Pharmacy owner Vishnu Patel, and Rock Ridge Pharmacy pharmacist Michelle Torpey.  

The Inflation Reduction Act will help make life more affordable by:

1. Lowering prescription drug prices, especially for seniors.
2. Capping annual out-of-pocket prescription costs at $2,000 starting in 2025 under Medicare — helping cut drug costs for thousands in North Jersey.
3. Capping the cost of insulin at $35-per-month for Medicare beneficiaries.
4. Providing support for families struggling with the high cost of health insurance.
5. Reducing health insurance premiums under the Affordable Care Act. 

The Inflation Reduction Act does not raise taxes on individuals, families, or small businesses in North Jersey, and makes no changes to personal income or small business tax rates. The bill is fully paid for and will help pay down the debt. The law amounts to a tax cut of more than $2,300 for every Fifth District family. It will also create jobs, invest in an All-of-the-Above energy plan to lower gas costs, boost alternative energy and domestic manufacturing, go after tax cheats, and make common sense climate investments.

These steps are a part of Gottheimer’s Affordability Agenda for Jersey, which is about getting prices down for families and small businesses and dealing with the impact of the post-COVID economy. It includes taking an All-of-the-Above approach to help get oil and gas prices down, lowering taxes, addressing our supply chain backup, increasing domestic manufacturing, fixing our crumbling infrastructure, and lowering prescription drug costs.  

In April, Gottheimer helped pass the bipartisan legislation he cosponsored, the Affordable Insulin Now Act — to cap the price of insulin at $35-per-month for all Americans with diabetes, not just seniors.

Below: Gottheimer in Glen Rock to announce new progress in the fight to lower prescription drug costs, particularly for insulin.

Video of the announcement can be found here.

Gottheimer’s full remarks as prepared for delivery are below.

Good morning. It’s so nice to be here on such a beautiful day at the Rock Ridge Pharmacy here in Glen Rock. This local pharmacy has served North Jersey families since the 1950s, and I want to thank them for their caring and dedication to helping our community stay healthy. 

I’m here today to announce a great win in our fight to make life more affordable for families in North Jersey. 

Late last year, I launched my Affordability Agenda for New Jersey, which is about steps we can take to get prices down for families and small businesses and deal with the impact of the post-COVID economy. It includes taking an All-of-the-Above approach to help get oil and gas prices down, lowering taxes, addressing our supply chain backup, increasing domestic manufacturing, fixing our crumbling infrastructure, and lowering prescription drug costs.  

I’m here today to highlight the tremendous progress we just made in our fight to get the cost of prescription drugs down – particularly for the price of insulin.  

After getting critical legislation signed into law this month, beginning in 2023, an estimated 5,700 residents from the Fifth District and more than 77,000 residents across New Jersey will have their insulin capped under Medicare at $35 per month. This applies to all Medicare beneficiaries, even those that have not met their deductible. 

Right now, insulin can cost up to $300 a vial and most people with diabetes need two to three vials per month – that could be more than $900 a month.

Nearly ten percent of Fifth District adults and more than 760,000 people in New Jersey have been diagnosed with diabetes. Across the country, more than 8 million Americans rely on insulin to live. For so many Jersey folks, insulin is just as essential to staying alive as water.

Yet, something so crucial to many of our lives has increased in price over recent years, making it difficult for families to afford it. In fact, in just five short years — from 2014 to 2019 — the price of insulin rose by 54 percent. 

According to the Health Care Costs Institute, from 2012 to 2016 the average price for a 40-day supply of insulin increased from $344 to $666. That’s thousands of dollars a year! Sadly, because of the astronomical price of insulin, roughly a quarter of diabetic patients skimp or even skip doses altogether — a last resort that can have fatal consequences. 

Can you imagine a parent having to ration their children’s lifesaving insulin, or a grandparent not having enough in their pocketbook for their grandchild’s birthday gift because the cost of insulin has bankrupted them? It’s heartbreaking and unacceptable. 

That’s why, after far too long, we’ve now taken action in Congress to pass the Inflation Reduction Act and get it signed into law — to lower prescription drug prices, especially for seniors; cap annual out-of-pocket prescription costs at $2,000 under Medicare, cap the cost of insulin at $35-per-month for Medicare beneficiaries, as we’ve talked about today, and provide support for families struggling with the high cost of health insurance.

The Inflation Reduction Act will also help the thousands of Fifth District residents covered through the Affordable Care Act save an average of more than $1,700 in health insurance premiums starting next year. It will also help some families in our District save nearly thousands on their premiums next year — especially our seniors. 

The Inflation Reduction Act will also cap Medicare beneficiaries’ annual out-of-pocket costs for prescription drugs at $2,000 per year starting in 2025 — helping cut prescription drug costs for thousands across our District.

In fact, if the drug pricing provisions from the Inflation Reduction Act were in place during 2020, the total cost of prescriptions filled by residents under Medicare in the Fifth District could have been $43 million lower. Saving would have totaled to $13 million in reduced out-of-pocket and premium costs.

Getting the Inflation Reduction Act signed into law is a huge win for Jersey. In addition to the fantastic healthcare benefits, it does not raise taxes on individuals, families, or small businesses in North Jersey, and makes no changes to personal income or small business tax rates — which was my key test. 

Plus, the bill is fully paid for and will help pay down the debt. In fact, when you add up all of the savings to families in the Fifth District, the law amounts to a tax cut of more than $2,300 for every family. 

It will actually save people thousands of dollars on prescription drugs and health care costs — among other wins, including creating jobs, investing in an All-of-the-Above energy plan to lower gas costs, boosting alternative energy and domestic manufacturing, going after tax cheats, and making common sense climate investments.

Now, while this bill is a huge win for cutting prescription drug and insulin costs, there is still more work to be done. I recently cosponsored and helped pass in the House the bipartisan Affordable Insulin Now Act — to cap the price of insulin at $35-per-month for all Americans with diabetes, not just seniors. I’m talking about the more than 34 million adults and more than 200,000 children, living with diabetes every day. All of those children. Unfortunately, our friends on the other side of the aisle have refused to support that. 

I’m calling on the Senate to immediately pass this bipartisan legislation, so that all those on private health insurance, regardless of their age, can also benefit from a $35-per-month insulin cap.

Overall, there is a clear need for aggressive action to get prices down for families and small businesses — to help deal with the impact of the post-COVID-19 economy. We need to address our supply chain, lower taxes, ensure greater competition in the food industry, take an All-of-the-Above approach to energy, increase domestic manufacturing, and continue to lower prescription drug costs. 

That’s what my Affordability Agenda for Jersey is all about — and I’m working with my colleagues on both sides of the aisle right now to get it done. Capping insulin at $35 a month for 5,700 North Jersey residents is a critical step, and so are the other big wins to cap out-of-pocket costs and reduce health insurance premiums under the Affordable Care Act. 

By working together, Democrats and Republicans, here in the greatest country in the world, our best days will always be ahead of us. Thank you and God bless you.

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