Medicare Part D Changes in 2025 Cap Oral Cancer Drug Costs and Introduce Payment Plan

The Inflation Reduction Act (IRA) has introduced significant changes to Medicare Part D in 2025, capping annual out-of-pocket costs for oral cancer drugs at $2,000 for beneficiaries. Prior to these changes, patients could face annual expenses exceeding $10,000 for lifesaving oral cancer medications, often leading to treatment abandonment due to high upfront costs. The new annual cap represents an 82% to 90% reduction in out-of-pocket expenses across ten popular brand-name specialty oral cancer drugs commonly used by Medicare patients.

The study by the University of Pennsylvania's Perelman School of Medicine highlights the limitations of the IRA cap alone, noting that without additional mechanisms, the full $2,000 would be due with the first prescription fill each year. To address this, the newly implemented Medicare Part D Monthly Prescription Payment Plan (MPPP) allows beneficiaries to spread these costs over 12 monthly payments, reducing the monthly burden to approximately $167 for the drugs studied.

Researchers emphasize the importance of early enrollment in the MPPP to maximize benefits, as spreading the out-of-pocket costs throughout the year can significantly improve treatment adherence. This program operates on a voluntary basis and depends heavily on oncology providers' awareness and communication with patients regarding its availability.

The study outlines the previous Medicare Part D cost structure, which included deductibles, coinsurance, and catastrophic coverage phases contributing to high early-year expenses. The IRA's reforms and the MPPP represent a strategic shift towards improving financial access and reducing economic barriers for Medicare patients requiring specialty oral oncology treatments.

This research underscores the critical role of policy innovation in addressing cost-related barriers within Medicare, particularly for specialty drugs with high price points. It also highlights an opportunity for healthcare providers and payers to enhance patient support through education and enrollment in cost management programs like the MPPP, potentially improving outcomes and continuity of care for Medicare beneficiaries.