1) Feb 13 -- The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' initial guidance for the Medicare Part B and Part D Prescription Drug Inflation Rebate Program for the implementation of the Inflation Reduction Act. CMS will be releasing additional Inflation Reduction Act-related guidance; all can be viewed on the dedicated Inflation Reduction Act section of the CMS website at https://www.cms.gov/inflation-reduction-act-and-medicare/
. Comments must be received by March 11, 2023.
2) Feb 9 [news release] -- As part of President Biden’s historic Inflation Reduction Act, the nation’s new prescription drug law, for the first time ever, drug companies will pay rebates to Medicare when their prescription drug prices increase faster than the rate of inflation for certain drugs dispensed to people with Medicare. The U.S. Department of Health and Human Services (HHS) announced next steps outlining how the Department will implement the new Medicare Prescription Drug Inflation Rebate Program, which will lower drug costs for millions of Americans. Today, the Centers for Medicare & Medicaid Services (CMS) released the initial guidance detailing the requirements and procedures for the new program. . . .
For decades, Americans have spent more on prescription drugs than people in other countries — paying two to three times more for the same drugs. The Biden-Harris Administration has made lowering high prescription drug costs in America a key priority, and the new prescription drug law makes changes to Medicare so that millions of people with Medicare will spend less on their prescriptions. For the first time ever in Medicare, through the new Medicare Prescription Drug Inflation Rebate Program, drug companies will have to pay for increasing prescription drug prices faster than the rate of inflation. In addition, people with Medicare may pay a lower coinsurance for certain Medicare Part B drugs.
If the new prescription drug law had been in place from July 2021 to July 2022, more than 1,200 prescription drugs potentially would have been subject to the inflation rebates. Under the Medicare Prescription Drug Inflation Rebate Program, drug companies who raise prices faster than the rate of inflation will be required to pay rebates to the Medicare Trust Fund. Below is a timeline of key dates for implementing the Medicare Prescription Drug Inflation Rebate Program:
-- October 1, 2022: Began the first 12-month period for which drug companies will be required to pay rebates to Medicare for raising prices that outpace inflation on certain Part D drugs.
-- January 1, 2023: Began the first quarterly period for which drug companies will be required to pay rebates for raising prices that outpace inflation on certain Part B drugs.
-- April 1, 2023: People with Traditional Medicare and Medicare Advantage may pay a lower coinsurance for certain Part B drugs with price increases higher than inflation.
-- 2025: CMS intends to send the first invoices to drug companies for the rebates.
The Medicare Prescription Drug Inflation Rebate Program will require rebates to the Medicare Trust Fund in cases of price increases that exceed inflation, particularly brand name drugs, which make up 80 percent of all prescription drug spending. Since one of the primary drivers of increased prescription drug spending has been increases in spending per prescription, requiring rebates for price increases above inflation for drugs already on the market may help reduce future growth in prescription drug spending.
As part of the initial guidance released today, CMS is seeking comment from the public on key topics, including:
-- the process to determine the number of drug units for rebatable drugs;
-- reduction of rebate amounts for certain Part B and Part D rebatable drugs in shortage and in cases of severe supply chain disruptions;
-- the process to impose civil monetary penalties on manufacturers of Part D rebatable drugs that fail to pay rebates;
-- assuring accuracy of the inflation rebate payments; and
-- other areas.
Comments received by March 11, 2023, will be considered for the revised guidance. CMS anticipates issuing revised guidance later in 2023 for the Medicare Prescription Drug Inflation Rebate Program.
Inflation Reduction Act and Medicare: https://www.cms.gov/inflation-reduction-act-and-medicare
Fact sheet: https://www.cms.gov/sites/default/files/2023-02/Inflation%20Rebate%20Fact%20Sheet%202.9.23.pdf
News release: https://www.cms.gov/newsroom/press-releases/hhs-releases-initial-guidance-medicare-prescription-drug-inflation-rebate-program