Medicare Part B and Part D drugs compared

Traditional Medicare and its enrollees spent about $66 billion in 2024 on drugs paid separately under Part B, the part of Medicare that covers doctor visits and outpatient care, according to the July 2026 data book from the Medicare Payment Advisory Commission¹ (MedPAC). Gross spending under Part D, the separate drug benefit sold by private plans, was about $289 billion the same year.

Part B and Part D cover different drugs, pay for them in different ways and charge enrollees differently. Most generics are Part D drugs, and 90 percent of Part D prescriptions in 2024 were filled with generics, MedPAC found. Part B spending is concentrated in injected and infused drugs, many of them biologics, and since 2023 it has had its own inflation rebate rules. In 2028 it gets its first Medicare negotiated prices.

Which drugs Part B covers

Part B "covers a limited number of outpatient prescription drugs under certain conditions," Medicare.gov says². Usually, the site says, Part B covers drugs a patient would not typically give to themselves. Most injectable and infused drugs administered by a licensed provider in a doctor's office or hospital outpatient department fall under Part B.

Beyond that, Part B covers a set of specific categories. They include flu, pneumococcal, COVID-19 and hepatitis B vaccines; drugs used with Part B-covered equipment such as infusion pumps; clotting factors for hemophilia; immunosuppressive drugs after a Medicare-covered transplant; some oral cancer drugs that also come in an injectable form; oral anti-nausea drugs taken within 48 hours of chemotherapy; and certain drugs for end-stage renal disease. Insulin used in a Part B-covered pump is a Part B drug, while insulin taken by pen or syringe is covered by Part D, according to Medicare.gov's insulin page³.

Part D covers most of what people pick up at a retail or mail-order pharmacy, along with most adult vaccines recommended by the federal vaccine advisory committee, with no cost sharing for those vaccines. The same molecule can land in either program depending on how and where it is given, so a hospital outpatient infusion and a self-injected pen of a related drug can be billed under different rules.

How Part B pays, at ASP plus 6 percent

For most Part B drugs, Medicare's payment limit is 106 percent of the drug's average sales price, or ASP, under section 1847A of the Social Security Act⁴. ASP is the manufacturer's average price to US purchasers net of discounts, rebates and other price concessions. Manufacturers report it every quarter, within 30 days after the quarter ends, and CMS turns the reports into a payment limit for each billing code, according to CMS's overview of Part B payment limits⁵.

That creates a two-quarter lag. The payment limit file for October through December 2026⁶ is based on ASP data from the second quarter of 2026. It lists 918 billing codes.

Generics are handled differently from brands. A drug with a generic competitor shares one billing code with its generic equivalents, and Medicare pays 106 percent of the volume-weighted ASP across all of them, MedPAC explains. Biosimilars get their own codes and are paid at their own ASP plus 6 percent of the reference biologic's ASP. Under the same section, qualifying biosimilars get 8 percent of the reference product's ASP instead, for five years, if they were paid by Medicare as of September 2022 or are first paid between October 2022 and December 2027. When no ASP is available, as with a new drug, CMS can pay up to 103 percent of the wholesale acquisition cost.

Hospitals in the 340B discount program were paid less for several years. MedPAC notes that Medicare paid them ASP minus 22.5 percent starting in 2018 and went back to ASP plus 6 percent in 2022 after a Supreme Court ruling; GxRadar's piece on how hospitals buy drugs follows the 2027 proposal that came next. For how ASP compares with other benchmarks, see our guide to WAC, AWP, NADAC and ASP.

How Part D pays, and why generics matter there

Part D plans pay pharmacies negotiated prices and collect rebates from brand manufacturers that are not made public. Generics account for most of the volume and little of the money. Of 3.1 billion prescriptions standardized to a 30-day supply in 2024, 90 percent were generics, while generics made up $36.1 billion, or 12.5 percent, of gross Part D spending, according to MedPAC.

Prices pharmacies pay for many common generics have fallen for a decade. The GxRadar generic price index, built from CMS survey data, stood at 47.4 in October 2026 against 100 in January 2014, a drop of about 53 percent. Our explainers on how Part D pays for generics and tiered formularies, and the NADAC price tracker, go further.

What enrollees pay in 2026

In traditional Medicare, the Part B deductible is $283 in 2026 and the standard monthly premium is $202.90, according to the CMS notice of Nov. 19, 2025¹². After the deductible, an enrollee generally owes 20 percent of the Medicare-approved amount for a Part B drug. Medicare.gov says providers must accept assignment for Part B drugs, so they should not ask for more than the coinsurance for the drug itself.

In 2026 the standard Part D benefit has a deductible of up to $615, then 25 percent coinsurance, and an annual out-of-pocket limit of $2,100, after which the enrollee pays nothing for covered drugs, according to CMS's 2026 program instructions⁸. Insulin is capped at $35 for a month's supply of each covered product in both parts.

Because an infused drug and a pharmacy drug fall under separate cost-sharing rules, questions about a specific bill are best taken to the plan or to the billing office of the clinic that gave the drug. Our explainer on Part D changes in 2025, 2026 and 2027 covers the cap in more detail.

Part B inflation rebates

Since Jan. 1, 2023, manufacturers of single-source Part B drugs and biologics, including some biosimilars, owe Medicare a rebate for any quarter in which the drug's payment amount has risen faster than inflation. Since April 1, 2023, enrollees' coinsurance on those drugs has been calculated as 20 percent of the lower, inflation-adjusted amount, CMS says⁷. Generics that share a billing code with their brand are not single-source drugs and fall outside this rule.

The coinsurance effect varies by quarter. For January through March 2025, CMS listed 64 drugs¹¹ with reduced coinsurance and estimated that coinsurance would be lower by $1 to $10,818 per day, depending on the drug. CMS stopped publishing a quarterly list after that. In GxRadar's count of the October 2026 payment limit file, 84 of the 918 billing codes carry a coinsurance percentage below 20 and above zero, with the lowest at about 1 percent. The 34 codes at zero are vaccines, HIV prevention drugs and a few COVID-19 treatments.

Rebate bills more than tripled from 2024 to 2025. CMS's fact sheets put Part B inflation rebates owed at more than $119 million for 2024⁹ and more than $360 million for 2025¹⁰, both as of June 2026, with amounts subject to later reconciliation. The 2025 invoices covered 99 billing codes; the largest, about $189 million, was for denosumab, an injectable osteoporosis and cancer-related bone drug. The money is deposited in the federal Supplementary Medical Insurance Trust Fund, not paid to individual patients.

What changes next

Two changes are scheduled. CMS proposed its 2027 inflation rebate rules on July 14, 2026, and its program page⁷ says a final rule is expected later this year. And starting Jan. 1, 2028, Part B drugs with Medicare negotiated prices will be paid at 106 percent of the negotiated price instead of 106 percent of ASP, according to CMS's payment limit overview⁵. Under the negotiation statute¹³, CMS must publish those negotiated prices by Nov. 30, 2026; the next quarterly payment limit file, for January through March 2027, will be based on ASP data from the third quarter of 2026.