Prescription drug rebates are coming: CMS

© Sherry Young stock.adobe.com

Prescription drug prices could drop for some patients due to rebates that pharmaceutical makers pay to the federal government.

On Dec. 14, 2023, the U.S. Centers for Medicare & Medicaid Services (CMS) published new guidance on rebates for medicines, stemming from provisions of the Inflation Reduction Act of August 2022. The law requires pharmaceutical makers to repay Medicare when certain drug prices increase faster than the rate of inflation, according to CMS.

Medicare participants could see savings ranging from $1 to $2,786 per average dose in 2024 due to the Medicare Prescription Drug Inflation Rebate Program for some drugs covered under Medicare Part B and Part D. CMS published a list of 48 prescription medicines with potentially lower coinsurances from January to March 2024 for Medicare Part B beneficiaries.

“The Inflation Reduction Act is making health care and prescription drugs more affordable while improving the sustainability of the Medicare program,” CMS Administrator Chiquita Brooks-LaSure said in a statement. “The Medicare Prescription Drug Inflation Rebate Program is an important tool to discourage excessive price increases and protect people with Medicare, and today’s revised guidance for the Inflation Rebate Program finalizes key requirements and outlines the process by which CMS will calculate and invoice inflation rebates beginning in 2025.”

The Medicare Part D inflation rebate period started Oct. 1, 2022, and the Part B rebate period started on Jan. 1, 2023. Inflation Rebate Program for 2025 will be retroactive, covering 2022, 2023 and 2024.

Prescription drug prices have become a focal point for criticism of the U.S. health care system. CMS’ guidance noted pharmaceuticals are facing drug shortages and supply chain disruptions. The inflation rebates do not apply to multi-source generic drugs that are most likely in short supply, but does apply to Part D sole-source generic drugs and Part B and Part D plasma-derived product that are in shortage.

“Today’s guidance strikes a balance between discouraging large price increases by drug companies and providing appropriate relief to drug companies experiencing shortages or severe supply chain disruptions,” CMS Deputy Administrator and Center for Medicare Director Meena Seshamani, MD, PhD, said in the CMS announcement. “Our goal at CMS is to make sure drugs are more affordable and accessible, which includes helping to safeguard and ensure that the pharmaceutical supply chain can deliver critical medicines to providers and patients.”