People with Medicare will benefit from lower prescription drug costs and a redesigned prescription drug program as a result of the new drug law.

Medicare Prescription Payment Plan

For the first time, beginning in 2025, the drug law, known as the Inflation Reduction Act, requires all Medicare prescription drug plans (Medicare Part D plans) — including both standalone Medicare prescription drug plans and Medicare Advantage plans with prescription drug coverage — to offer enrollees the option to pay out-of-pocket prescription drug costs in the form of capped monthly installment payments instead of all at once at the pharmacy.

More Information about Medicare Prescription Payment Plan

Part D Redesign Program Instructions for 2025

CMS is detailing improvements to the structure of the Part D drug benefit for Coverage Year (CY) 2025 that will result in lower drug costs for millions of people with Medicare through the release of the CY 2025 Part D Redesign Program Instructions. Thanks to the Inflation Reduction Act, in 2025 annual out-of-pocket costs will be capped at $2,000 for people with Medicare Part D. 

Fact Sheet: Final CY 2025 Part D Redesign Program Instructions (PDF) (April 1, 2024)

Final CY 2025 Part D Redesign Program Instructions (PDF) (April 1, 2024)

Fact Sheet: Draft CY 2025 Part D Redesign Program Instructions (January 31, 2024)

Draft CY 2025 Part D Redesign Program Instructions (January 31, 2024)

• Draft CY 2025 Part D Redesign Program Instructions Errata (February 13, 2024): We have identified a typographical error in an illustrative example in the Draft CY 2025 Part D Redesign Program Instructions. Specifically, in section 40, Policy for Drugs Not Subject to the Defined Standard Deductible, we provided a scenario on page 10 to illustrate how the policy would work. In that example, we incorrectly stated that the hypothetical beneficiary would have $550 in remaining TrOOP-eligible costs before the beneficiary satisfies the defined standard deductible. The correct amount of remaining TrOOP eligible costs is $390, not $550.

Part D Manufacturer Discount Program

The drug law, known as the Inflation Reduction Act, requires CMS to establish a Part D manufacturer discount program beginning on January 1, 2025 as part of the redesign of Medicare Part D benefit. This program will replace the existing Coverage Gap Discount Program, which sunsets as of January 1, 2025. 

Part D Manufacturer Discount Program Final Guidance (PDF) (November 17, 2023)

Methodology for Identifying Specified Manufacturers and Specified Small Manufacturers (PDF) (November 17, 2023)

Part D Manufacturer Discount Program Draft Guidance (PDF) (May 12, 2023)

Part D Manufacturer Discount Program Agreements

Drug manufacturers and other interested parties may now review the Manufacturer Discount Program Agreement (PDF) and the third party administrator (TPA) Agreement (PDF). Participating manufacturers may sign the agreements beginning December 15, 2023. The agreements will be executed in the CMS Health Plan Management System (HPMS).

The Manufacturer Discount Program ICR is now final and the data entry forms are available for viewing on Reginfo.gov.  Click “all” to see full details.

Medicare Insulin and Vaccine Benefits

Starting in 2023, people with Medicare Part D coverage pay no more than $35/month per covered insulin product. This benefit will expand to Part B coverage on July 1, 2023. Under the drug law, known as the Inflation Reduction Act, recommended vaccines are available at no cost for people with Medicare prescription drug coverage.

Update on ACIP-Recommended Vaccines (PDF) (July 24, 2023)

Frequently Asked Questions about Medicare Insulin Cost-Sharing Changes in the Prescription Drug Law  (PDF) (July 2023)

Contract Year 2023 Program Guidance Related to Inflation Reduction Act Changes to Part D Coverage of Vaccines and Insulin (PDF) (September 26, 2022)

Contract Year 2026 Medicare Advantage and Part D Proposed Rule (CMS-4208-P)

On November 26, 2024, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would revise the Medicare Advantage (MA) Program, Medicare Prescription Drug Benefit Program (Part D), Medicare Cost Plan Program, Programs of All-Inclusive Care for the Elderly (PACE). The proposed rule includes several proposals related to the Inflation Reduction Act (IRA) including Part D improvements such as $35 covered insulin and $0 ACIP recommended vaccines for CY2026 and future years. Additional information can be found in the Press Release and Fact Sheet. To review or comment on the CY 2026 MA and Part D proposed rule during its 60-day public comment period, visit the Federal Register. Comments must be submitted no later than January 27, 2025.