Medicare is the government program that insures many older Americans and people living with disabilities. Medicare coverage is divided into four main parts: Part A (hospital benefit), Part B (medical benefit), Part C (Medicare Advantage offered by private plans) and Part D (prescription drug benefit offered by private plans). The majority of medicines covered by Medicare are covered under Part D and Part B.

Outpatient prescription medicines are generally covered by Medicare Part D, which began providing prescription drug benefits in 2006. Part D is administered by private plans using a competitive bidding system, which achieves savings and helps preserve incentives for continued innovation in biopharmaceutical research and development.

Injected or infused vaccines and medicines administered or purchased by physicians are generally covered by Medicare Part B. This is similar to the medical benefit provided under commercial insurance plans. Many of the medicines covered by Part B are for serious and complex conditions such as cancer and rheumatoid arthritis.

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