Medicare to get rebates for 64 prescription drugs
The government plans to bill the drugmakers for the rebates by late 2025, as part of the new Inflation Reduction Act requirement.
Prescription drug makers will owe the Medicare trust fund rebates for 64 prescription drugs in the third quarter, according to the Centers for Medicare and Medicaid Services.
The federal Inflation Reduction Act now requires drug companies to pay rebates to Medicare when prices for some drugs rise faster than the rate of inflation.
The number of drugs affected by rebates in the latest quarter is up from 41 in the second quarter of this year, and it’s up from 38 in the third quarter of 2023.
One example of a drug newly added to the list is Krystexxa, a heavily advertised drug for gout.
The rebates can cut the coinsurance amounts people using Medicare Part B outpatient and physicians coverage pay for covered drugs.
The rebates can also cut out-of-pocket spending for people with Medicare Part D prescription drug coverage.
The range of discounts for the new quarter is $1 to $4,593 per day.
In the second quarter, the range was $1 to $3,575 per day.
Related: In January, HHS will impose ‘inflation penalties’ on 48 prescription drugs
The price increase rebate provision in the Inflation Reduction Act is separate from the act provision that will let Medicare program managers actively negotiate for discounts for a small number of drugs.
https://www.benefitspro.com/2024/02/19/patients-see-first-savings-from-bidens-drug-price-push-as-pharma-lines-up-its-lawyers/
CMS officials said the government will begin collecting the rebate cash from the drugmakers by fall 2025.
The program could help lower drug prices for employer drug plans, by helping employer plans and their pharmacy benefit managers, or PBMs, demand similar discounts and lowering costs for employers’ own Medicare-based retiree health plans.
The program could also push up employer plan drug prices, by causing drugmakers to get more money from commercial plans to compensate for any reductions in Medicare revenue.
CMS and the PBMs
The law gives CMS something in common with PBMs.
PBMs are famous for talking about the size of the discounts they have negotiated but not focusing on actual price the plan pays. Critics contend that PBMs may have an incentive to push drug makers to increase list prices, because higher list prices can help PBMs show they have negotiated bigger discounts.
The CMS drug price rebate program could end up facing similar criticisms, because CMS is highlighting the size of the discounts in the quarterly rebate reports, not showing either the full list price of the drugs covered or from a similar weak.