Feds Share Details on Inflation Rebates for Medicare Prescription Drugs
Beneficiaries may have an inflation-adjusted coinsurance rate as low as 10.27 percent on certain Medicare prescription drugs, depending on their coverage.
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- The Department of Health and Human Services (HHS) and CMS have lowered prices for over two dozen Medicare prescription drugs including biologics for a set timeframe.
Starting on April 1, 2023, Medicare beneficiaries who take one or more of the 27 drugs on the list may reap savings due to lower coinsurance. However, the cost relief information that HHS released is relevant only for one quarter. Part B coinsurance adjustments can change quarter-to-quarter. The reduced coinsurance timeframe ends on June 30, 2023.
“The Medicare Prescription Drug Inflation Rebate Program is a critical way to address long-term price increases by drug companies while improving access and affordability for the millions of people with Medicare coverage,” CMS Administrator Chiquita Brooks-LaSure said in the press release.
“Continued implementation of the new drug law strengthens Medicare, faithfully guards taxpayer dollars, and improves the long-term sustainability of the program for generations to come.”
The Medicare Prescription Drug Inflation Rebate Program’s goal is to combat practices among pharmaceutical companies that raise drug prices faster than the increasing inflation rate. It applies a rebate to companies that did this.
Beneficiaries will pay about 20 percent of the inflation-adjusted payment amount. Drugs like Fetroja (10.27 percent), Fragmin (13.9 percent), Carnitor (13.9 percent), Akynzeo (16.2 percent), and Nipent (17.2 percent) had the lowest inflation-adjusted coinsurance percentages.
Other drugs—like Tecartus (19.95 percent), Yescarta (19.93), Winrho SDF (19.88 percent), Sylvant (19.77 percent), and Rybrevant (19.74 percent)—remained fairly close to the typical 20 percent coinsurance rate.
The press release estimated that seniors could save anywhere from $2 to $390 per average dose because of this policy. The actual amount will vary based on the beneficiary’s coverage. Additionally, HHS and CMS expected that the policy would decrease the Medicare program’s prescription drug spending.
“The Biden-Harris Administration believes people with Medicare shouldn’t be on the hook when drug companies inexplicably jack up the prices of their drugs,” HHS Secretary Xavier Becerra explained in the press release.
“President Biden made lowering prescription drug costs for Americans a top priority and we’re using every lever we have to deliver results. With the inflation rebate program, we are fighting to ensure seniors can afford the treatments they need, taxpayers aren’t subsidizing drug company excess prices, and the Medicare program is strong for millions of beneficiaries now and in the future.”
The announcement is part of the Biden administration’s Medicare Prescription Drug Inflation Rebate Program. HHS first released guidance about the Medicare Prescription Drug Inflation Rebate Program in early February 2023.
One of the first aspects of the Inflation Reduction Act to go into effect was related to prescription drugs, specifically biosimilars. The law implemented a payment boost for biosimilars in Medicare. This portion of the Act went into effect on October 3, 2022.
Additionally, HHS released information about the process for Medicare drug price negotiations, another prescription drug-related facet of the Inflation Reduction Act. While HHS announced these details in January 2023, the prices will not go into effect until 2026.
