Fact-checking Biden’s statement on prescription costs for Medicare including cancer drugs

Part of President Joe Biden’s election year pitch to Latino voters includes a promise to lower health care costs.

Online, a Biden campaign ad warned in both English and Spanish that former President Donald Trump called the Affordable Care Act, aka Obamacare, a "disaster." Another ad appealed to "abuelos" (grandparents) and highlighted the cost of insulin under Biden.

In an interview that aired April 9, Enrique Acevedo, anchor for Univision News’ Spanish-language news show, "El punto," asked Biden about how health care expenses affect Latinos: "What specifically is your administration doing to try to help ease that burden?"

In his response, translated into Spanish, Biden hit on two matters we’ve rated before. He said people in the U.S. can get the same prescription for "40(%) to 60% less" than in other countries. (Mostly True.) And he said that people "only have to pay $35 a month now" for insulin instead of $400 a month. (Half True.)

Biden also cited changes that, as of 2025, will cap out-of-pocket drug costs. He said that under this shift, "No matter what your total bills are for prescription drugs, you'll never have to pay …  more than $2,000 a year, because some of these cancer drugs are 10(,000 to) 15,000 bucks a year."

We found that Biden is largely accurate about the cap’s effect. One caveat is that some expensive cancer drugs delivered in doctors’ offices — as with chemotherapy — are not subject to the cap. 

Biden was referring to the Inflation Reduction Act, part of which targeted prescription drug costs. It passed in 2022 with no Republican support and Biden signed it into law.

One part of the law affects annual out-of-pocket drug costs for enrollees in Medicare, the federal health insurance program for people older than 65, younger people with certain disabilities and people with end-stage renal disease. Medicare’s drug coverage is known as Part D. 

Beneficiaries who take a lot of medication or are prescribed very expensive drugs will see their share of the costs lowered and capped at $2,000 a year by 2025. 

The Congressional Budget Office estimated that the Medicare out-of-pocket-cap will cost the federal government about $30 billion over 10 years.

A Biden spokesperson pointed to an analysis by KFF, a nonpartisan source of health care policy analysis. KFF found that, if the $2,000 cap on out-of-pocket drug spending had been in place in 2021, 1.5 million Medicare beneficiaries enrolled in Part D plans would have saved money. Among those enrollees, most 68% spent $2,000 to $3,000 out of pocket, while 20% had spending of $3,000 up to $5,000, and 12% spent $5,000 or more out of pocket.

"In most states, tens of thousands, if not hundreds of thousands, of Medicare beneficiaries will feel relief from the new Part D out-of-pocket spending cap," KFF wrote.

Part D is voluntary, but has strong financial incentives to encourage people to enroll when they become eligible, unless they have comparable coverage under another plan, KFF Senior Vice President Tricia Neuman said. 

The vast majority of Medicare beneficiaries are enrolled in the program’s drug prescription benefit, Part D.

Many Medicare beneficiaries who lack Part D have drug coverage through another source, such as their employer or their spouse’s employer.

"These other forms of coverage are not subject to the $2,000 cap, although some other out-of-pocket limit may apply and implementation of the cap will indirectly tighten the requirements that apply to some retiree plans," said Matthew Fiedler, senior fellow in economic studies at the Center on Health Policy at the Brookings Institution, a Washington, D.C., think tank.

Biden said cancer drugs can cost $10,000 to $15,000. Research from KFF and a Vanderbilt University study backs that up. 

KFF found that for the five drugs with the highest per capita Part D expenditures in 2021 used by more than 10,000 Part D enrollees — Revlimid, Pomalyst, Imbruvica, Jakafi and Ibrance, all cancer treatments — annual out-of-pocket costs per drug in 2023 ranged from more than  $11,000 to nearly $15,000. 

The White House pointed to another KFF analysis that said three drugs taken to treat different forms of cancer — Lynparza, Ibrance, and Xtandi — cost Medicare Part D enrollees $12,000 for the year.

Stacie Dusetzina, a cancer research and health policy professor at Vanderbilt University, wrote in an article published in 2022 the New England Journal of Medicine that the out-of-pocket cost of one year of some anticancer prescriptions can range from $10,000 to $15,000. That dollar figure comes with a caveat: some patients may not fill the prescription or take it the whole year because of the cost. A U.S. Department of Health and Human Services spokesperson pointed to that journal article.

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Barack Obama

stated on August 11, 2009 in a town hall meeting.

"I just want to assure [you] we're not talking about cutting Medicare benefits."

Dusetzina wrote in a separate study that among beneficiaries without subsidies, about 30% did not fill their prescriptions for anticancer drugs.  

"This is really just a very important change, it's a huge amount of savings for people with cancer," Dusetzina said.

The change in the law pertains to Medicare’s pharmacy benefit.  

About half of the cancer drugs available are on medical benefit and half are on pharmacy benefit, Dusetzina said. In recent years, more newly marketed cancer drugs have been self-administered and therefore fall under Part D.

That means that the cap doesn’t apply to patients who get an infusion of chemotherapy at a doctor’s office — something Medicare Part B would cover. How much patients pay for chemo over a year varies on their benefits, including the terms of their supplemental coverage or whether they have Medicare Advantage, and how much the patients have spent on other medical services that year.

Biden said, starting in 2025, "no matter what your total bills are for prescription drugs, you'll never have to pay …  more than $2,000 a year, because some of these cancer drugs are 10(,000 to) 15,000 bucks a year."

The Inflation Reduction Act, which Biden signed into in 2022, limits out-of-pocket prescription spending to $2,000 per year starting in 2025 for Medicare Part D enrollees. 

One sticking point is that the cap covers only drugs received through pharmacies, not those in a doctor’s office. 

We rate this statement Mostly True.

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