Dozens of pharmaceutical companies will be required to pay rebates to the Medicare program after they were found to have raised prices of 48 Part B drugs faster than the rate of inflation.
There were "outrageous price hikes" on medications that more than 750,000 seniors take annually, according to a recent Biden administration announcement. Drug companies are required to pay the rebates under the administration’s Inflation Reduction Act, which was passed last year.
To that end, the Department of Health and Human Services (HHS) has released the list of the 48 drugs that hiked prices faster than inflation and may be subject to rebates in the first quarter of 2024. Starting on January 1, some beneficiaries who take these drugs will have a lower coinsurance than what they would have otherwise and their out-of-pocket costs may decrease by $1 to as much as $2,786 per dose, HHS said.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The administration said that a total of 64 drugs, whose prices rose faster than inflation during the last four quarters, may be subject to rebates. This includes the endocrine disorder drug Signifor, it said, adding that beneficiaries who take this drug may save $311 per monthly dose starting in January.
The announcement comes on the heels of the closing of Medicare's annual open enrollment period for 2024.
New HHS report on the first 10 drugs selected for talks
Earlier this year, the Centers for Medicare & Medicaid Services (CMS) listed the first 10 drugs selected for talks with pharmaceutical companies under the Medicare drug price negotiation program.
HHS has now issued a new report on the 10 drugs selected for that first cycle of the program. The report found that total Medicare Part D spending on the 10 drugs more than doubled from 2018 to 2022 — more than three times as fast as for all Part D drugs over the same period, HHS said.
“These first 10 drugs make up nearly 20 percent of spending in the Medicare Part D drug benefit,” said Rebecca Haffajee, principal deputy assistant secretary under the Assistant Secretary for Planning and Evaluation (ASPE), which produced the report. “Negotiating prices on these drugs has the potential for significant savings to enrollees, taxpayers, and the Medicare program. As additional drugs are selected for negotiation in future years, the benefits of negotiation will continue to grow.”
Drug companies push back
Drugmakers have fought back against the price negotiation talks, saying that lower revenues for pharmaceutical companies will discourage investments in new technology and medicines to help find cures and treatments, as described in a July 23 New York Times report.
Guidance on CMS and HHS programs
The CMS and HHS provide a variety of reports and guidance documents on these and other Medicare programs. For more information on reducing coinsurance for certain Part B rebatable drugs under the Medicare prescription drug inflation rebate program, see this CMS fact sheet. Revised guidance in a Q and A format on the program, can be found here. For revised guidance on Part D, visit this CMS site.
For more information on the Medicare drug price negotiation program, the HHS provides the full ASPE report here.
-
Visa, Mastercard's Swipe Fee Settlement Might Save You Money, For NowThe limited-time agreement directly benefits merchants, which can potentially pass savings on to consumers.
-
New List Out On Medicare Part B Drugs Eligible for RebatesSome Medicare beneficiaries may pay lower coinsurance rates from April 1 to June 30 for the drugs, HHS says.
-
Use An iPhone? You May Be Hearing From A Class-Action Lawsuit GroupA handful of suits against the iPhone maker seek to crack down on everything from app store purchases to messaging.
-
Capital One/Discover: What's In Their Wallet For You?Push back on Capital One's planned merger with Discover is growing with one group of consumer advocates calling for a public hearing.
-
Lawmakers: Nix Social Security Offsets For Seniors In Student Loan DefaultOffsetting Social Security benefits to pay for defaulted student loans can be devastating for some beneficiaries, lawmakers say.
-
Stellantis Recalls 285K Vehicles Over Airbag ProblemsDefective airbag inflators on certain Chrysler and Dodge vehicles could rupture and cause injury or death, NHTSA says.
-
HHS Funding Secured As Major Government Shutdown AvoidedWith passage of the fiscal 2024 appropriations package, Medicare and Social Security are among the key agencies to receive funding through September 30.
-
State Farm To Exit Homeowner Renewal Policies in CaliforniaState Farm plans to send non-renewal notices to 72,000 home and apartment policyholders starting this July.
