Medicare Drug Costs Expected to Rise in 2027

Prescription-drug costs and oversight are drawing scrutiny from multiple fronts. Medicare Part D spending is projected to reach $222 billion in 2026, while the Inflation Reduction Act’s out-of-pocket cap and pricing provisions have increased demand for costly medicines and produced fewer federal savings than expected, according to a Manhattan Institute analysis. Beneficiaries also face a Part D deductible rising to $700 in 2027, alongside the expiration of a federal subsidy and the Medicare Part D Premium Stabilization Demonstration, changes that could increase premiums and make annual plan comparisons more important. Separately, industry testimony in an FDA meeting on generic-drug user-fee reauthorization called for greater transparency, while public commenters raised concerns about generic-drug quality, manufacturing-related shortages and the balance between availability and safety. An American biopharmaceutical executive also argued in testimony supporting a U.S. trade investigation that Germany’s pharmaceutical pricing policies underpay for American innovation and could threaten future investment in new treatments.