Medicare beneficiaries will pay less for their prescription drugs and the amount they pay each year for prescription drugs will be capped at $2,000.

President Joe Biden on Tuesday signed the Inflation Reduction Act of 2022, his landmark legislation to reform drug pricing for seniors. Currently Americans pay two to three times what citizens of others pay for prescription drugs, Biden said.

RELATED: Congress passes Inflation Reduction Act: What it means for health care

As a result of the legislation, the White House administration said

  • 5-7 million Medicare beneficiaries could see their prescription drug costs go down because of the provision allowing Medicare to negotiate prescription drug costs
  • 50 million Americans with Medicare Part D will have their costs at the pharmacy capped at $2,000 per year, directly benefiting about 1.4 million beneficiaries each year
  • 3 million Medicare beneficiaries with diabetes will have their insulin costs capped at $35 for a month’s supply

RELATED: Inflation Reduction Act contains important cost-saving changes for many patients

“This is one of the most important pocketbook issues for older Americans—across political aisles and across the country,” AARP CEO Jo Ann Jenkins said in a statement after the bill signing, noting that the organization has fought hard to lower prescription drug prices for decades. “We have made our voice loud and clear: Drug prices have been out of control, and enough is enough.”

In addition, the legislation will lower health care premiums for millions of families who receive coverage under the Affordable Care Act, Biden said during the signing of the bill. “Last year, a family of four saved on average $2,400 through the American Rescue Plan that I signed into law that Congress voted in place. In the years ahead, thanks to the Inflation Reduction Act, 13 million people are going to continue—continue to save an average of $800 a year on health insurance.”

Rising costs of health care has led a quarter of adults polled by the Kaiser Family Foundation to report that they or a family member in their household have not been able to afford a prescription, cut pills in half, or skipped doses of medicine in the last year because of the cost.

The House approved the legislation on Friday along party lines with a 220-207 vote. Days earlier the Senate passed the legislation with Vice President Kamala Harris breaking a 50-50 tie vote. The law will be paid for via new taxes on large companies and IRS enforcement of wealthy individuals. Additional funds will be used to reduce the federal deficit.