The names of 34 Part B prescription drugs whose prices were raised more than the rate of inflation were released by the Centers for Medicare & Medicaid Services (CMS) on Sept. 13, the third set of medications the agency has identified. Starting Oct. 1, beneficiaries could pay less out of their pockets for this latest group of drugs than they would have before the new drug law.
Under the prescription drug provisions of the 2022 Inflation Reduction Act, drugmakers who raise their prices higher than the rate of inflation will have to pay a penalty, in the form of a rebate, to Medicare. The rebate will be the difference between what the price increase would have been if the manufacturer had stuck to the inflation rate for its increase and what the actual price hike was.
Drug companies won’t have to pay the rebates for these 34 medicines until 2025, but starting on April 1, 2023, the 20 percent coinsurance that consumers are charged began to be calculated based on what the price would have been if any price increase had been held to the inflation rate. Each quarter, CMS will issue a new list of drugs that will be subject to rebates, based on the rate of inflation. Which drugs are subject to rebates could change each quarter as the rate of inflation changes.
“This is a sign that this law is in effect and working to reduce prescription drug prices and costs,” says Leigh Purvis, AARP senior director of health care costs and access. “We’re already seeing the benefits of this new law.”
These 34 medications are all paid for under Medicare Part B, which means they are administered in a doctor’s office or other outpatient setting. Many of the drugs identified are either chemotherapy medicines to treat cancer or address the aftereffects of chemotherapy, organ transplants or chronic kidney disease.
CMS will not identify which medications paid for under the Part D prescription drug benefit will be subject to a rebate until later this year. Part D medications are generally taken by patients in pill form and represent the majority of prescription drugs used by Medicare enrollees.