Have Drug Prices Dropped As Much As Joe Biden Claims?

President Joe Biden's recent claims about dramatic reductions in insulin costs for Medicare beneficiaries are being scrutinized.

Speaking at an event in Nevada, Biden said: "How many of you know someone who needs insulin? OK, well, guess what? It was costing $400 a month on average. It now costs $35 a month."

While the Inflation Reduction Act indeed implemented a price cap benefiting many, Biden's assertion that beneficiaries previously paid an average of $400 monthly for insulin oversimplifies the pricing landscape.

Analysis from PolitiFact and a report by the U.S. Department of Health and Human Services indicates that, although some individuals may have faced high costs, the average amount paid by most Medicare enrollees was considerably lower.

The Inflation Reduction Act, signed into law by Biden in 2022, specifically targets out-of-pocket expenses for Medicare beneficiaries, capping them at $35 per month. The legislative change has undoubtedly eased the financial burden for many who require insulin to manage their diabetes.

However, data cited by PolitiFact suggests the narrative of a universal $400 monthly expense prior to the act may not hold universally true. Research shows that while some Medicare beneficiaries did experience high out-of-pocket costs, the figures varied widely depending on their insurance plan's coverage phase and individual medication requirements.

According to a 2023 report from the Department of Health and Human Services, if the cap had been in effect in 2020, it would have saved Medicare beneficiaries an estimated $500 annually on insulin.

The report also highlights that in 2019, about 37 percent of insulin prescriptions for Medicare enrollees cost more than $35 per fill, and 24 percent exceeded $70.

Despite the cap, Medicare Part D's structure—comprising deductibles, coverage phases, and catastrophic coverage—can still result in variability in what patients pay throughout the year. The system often made it difficult for patients to predict their monthly expenses prior to the cap, contributing to the perception of uniformly high costs.

According to the Health Care Cost Institute, even before the Inflation Reduction Act took effect, only a small percentage of all insulin users under employer-sponsored insurance plans were near the $400 mark in monthly expenses. In 2019, the group represented just 8.7 percent of all insulin users, with the median monthly out-of-pocket spending for insulin around $315.

While President Biden's assertion that insulin prices have dropped to $35 per month under the Inflation Reduction Act is accurate for Medicare beneficiaries, the claim that prices were uniformly around $400 per month before the act is an oversimplification.

The actual costs incurred by Medicare beneficiaries varied widely due to several factors including insurance coverage phases and the specific insulin delivery systems used.

Newsweek has reached out to both the White House and the Department of Health and Human Services for comment by email.