Medicare Caps Oral Cancer Drug Costs and Expands Payment Options in 2025

Recent policy changes under the Inflation Reduction Act (IRA) have capped annual out-of-pocket expenses for Medicare beneficiaries on oral cancer medications at $2,000, significantly lowering previous costs that often exceeded $10,000.

 This cap helps reduce the financial burden of specialty oral cancer drugs for Medicare Part D beneficiaries, impacting tens of thousands of patients annually. Additionally, a voluntary initiative named the Medicare Prescription Payment Plan (MPPP) enables patients to spread these costs through manageable monthly payments, enhancing affordability further.

 Researchers from the Perelman School of Medicine studied the effects of these policies on the out-of-pocket costs for ten common oral cancer drugs, demonstrating substantial reductions when combining the annual cap with monthly payment options.

The MPPP, introduced in 2025, allows beneficiaries enrolling early in the year to incur about $167 per month in drug expenses, making treatment costs more predictable and accessible. This policy innovation reflects a significant shift in managing high-cost specialty pharmaceuticals under Medicare, potentially improving adherence to lifesaving treatments and outcomes for cancer patients.