Ahead of Medicare negotiations, White House flexes IRA's rebate powers for speedy price hikes
14 Dec 2023
Preview
Source: FiercePharma
All the drugs up for rebates are included under Medicare Part B, which specifically covers drugs and vaccines given to patients in doctors’ offices or hospital outpatient departments.
Ahead of 2026’s Medicare drug price negotiations, the White House is getting ready to crack down on companies who’ve raised the costs of their medications faster than the rate of inflation. The move marks the latest in a series of price-fighting measures being rolled out under 2022’s Inflation Reduction Act (IRA).
Drugmakers are likely to have to pay rebates to Medicare in 2024’s first quarter over what the White House on Thursday called “outrageous” price hikes on prescription meds.
According to a new release, 48 Medicare Part B drugs saw their prices grow faster than inflation in the final quarter of 2023, and some drug companies raised prices faster than inflation during every quarter over the past year.
The proposed rebates under IRA could save seniors who take the meds in question between $1 and $2,786 per dose, the White House said.
All the drugs up for rebates are included under Medicare Part B, which specifically covers drugs and vaccines given to patients in doctors’ offices or hospital outpatient departments.
Starting in January, some Medicare patients who take the 48 selected drugs—which include medications to treat cancer and fight infections—could have lower coinsurance than what they would have paid otherwise, the White House added.
What’s more, over the past four quarters, 64 total drugs had price hikes that eclipsed the rate of inflation and may be subject to rebates under IRA. Some of those drugs, such as Novartis’ Signifor—used to treat an endocrine disorder—have boosted their prices faster than inflation every quarter since the IRA’s inflation rebate provision rolled out. Certain patients who take Signifor specifically could save $311 per monthly dose starting in January, thanks to the law, the administration said.
President Joe Biden will speak on his administration’s efforts to lower prescription drug costs at the National Institutes of Health (NIH) in Bethesda, Maryland, this afternoon.
Inflation-based rebates are just one of several drug pricing provisions sewn into 2022’s Inflation Reduction Act. Chief among those measures are the looming price negotiations on 10 select drugs that accounted for the bulk of Medicare Part D spending from 2022 to 2023.
Back in August, the Centers for Medicare and Medicaid Services (CMS) unveiled its list of 10 drugs up for the first round of talks.
Just last week, meanwhile, the Biden Administration determined it has the power to take back patents of certain high-priced drugs under so-called “march-in” rights. "March-in" rights on government-funded research have long been debated as a potential measure to reduce drug prices, but never actually deployed.
Outside of IRA, the Federal Trade Commission has been taking actions to curb drug prices. For instance, the FTC recently released a policy statement warning brand-name drugmakers the agency could take legal action if patents are improperly listed in the FDA's Orange Book.
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