Lower-Cost Medicines Act (S. 4323)

Summary

Makes prescription drugs more affordable for seniors by requiring Medicare drug plans to cover cheaper generic and biosimilar versions of brand-name medicines.

What problem does this solve?

Seniors on Medicare sometimes pay high prices for brand-name drugs because their insurance does not cover cheaper generic versions. This bill requires Medicare drug plans to include these lower-cost generic and biosimilar drugs and offer them with lower co-pays.

What does this bill do?

Requires inclusion of cheaper generics and biosimilars

Starting in 2028, if a Medicare drug plan covers a brand-name drug, it must also cover any cheaper generic or biosimilar version of that drug.

Creates special low-cost tiers for generics

Requires plans to create at least one drug tier that only includes generics and biosimilars. Co-pays for this tier must be at least $20 lower than the lowest tier for brand-name drugs.

Bans unfair limits on generic drug access

Prohibits plans from making it harder for patients to get generic drugs than the brand-name version, such as by requiring special permission or making them try other drugs first.

Establishes a lower-cost specialty tier

For very expensive drugs, plans must create a separate specialty tier for generics and biosimilars with a coinsurance rate at least 5 percentage points lower than the regular specialty tier.

Who does this affect?

Seniors on Medicare
Medicare Part D plan providers
Generic and biosimilar drug manufacturers

What is the real world impact?

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Reduces prescription drug costs for seniors

Ensures that when a cheaper generic or biosimilar version of a brand-name drug is available, Medicare plans must cover it. This helps lower out-of-pocket expenses for people on Medicare.

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Promotes competition from generic drugs

By requiring plans to cover generics and biosimilars, the bill encourages their use over more expensive brand-name drugs. This can increase market competition and drive down overall drug prices.

When does this start?

The new rules for Medicare drug plans will take effect for plan years starting on or after January 1, 2028.

Quarterly drug list updates

Starting in 2028, Medicare plans must review and update their lists of covered drugs every three months to include any newly available, lower-cost generic and biosimilar medicines.