According to a Jan. 11 press release, the U.S. Department of Health and Human Services (HHS) announced key dates for the first year of the Medicare Drug Price Negotiation Program under the Inflation Reduction Act, which will lower drug costs for millions of individuals in the U.S. Historically, this is the first time Medicare will be able to negotiate prescription drug prices due to the Inflation Reduction Act. The process begins in 2023 and the negotiated prices will go into effect in 2026.
The press release states that “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 Inflation Reduction Act makes changes to Medicare so that millions of people with Medicare will spend less on their prescriptions. For the first time ever, the HHS Secretary will be able to negotiate directly with drug manufacturers for prices of prescription drugs on behalf of Medicare, starting with a selection of 10 high-cost Medicare Part D drugs.”
Further, “Key dates for implementation include:
- By September 1, 2023, CMS will publish the first 10 Medicare Part D drugs selected for the Medicare Drug Price Negotiation Program.
- The negotiated maximum fair prices for these drugs will be announced by September 1, 2024 and prices will be in effect starting January 1, 2026.
- In future years, CMS will select for negotiation 15 more Part D drugs for 2027, 15 more Part B or Part D drugs for 2028, and 20 more Part B or Part D drugs for each year after that, as outlined in the Inflation Reduction Act.”
There have already been major provisions of the Inflation Reduction Act in effect already, including:
- Free vaccines: Recommended vaccines are free for individuals with Medicare prescription drug coverage as of Jan. 1, 2023
- Insulin cap: Cost-sharing for a month’s supply of each covered insulin is capped at $35 and there is no deductible for these products for people with Medicare prescription drug coverage as of Jan. 1, 2023
- Rebates required from drug manufacturers’ increasing prices faster than inflation: Manufacturers will need to pay rebates to Medicare if they increase prices for certain drugs at a rate that exceeds the rate of inflation
- ACA Subsidies: More people will qualify for help purchasing affordable health coverage
- Biosimilars: In October of 2022, CMS implemented the Medicare Part B payment changes for qualifying biosimilars
“CMS also released a memo with more details on the implementation steps for the Medicare Drug Price Negotiation Program, laying out the opportunities for engagement and public feedback throughout the implementation process,” the release adds. “The memo details multiple comment opportunities for members of the public, people with Medicare and consumer advocates, pharmaceutical manufacturers, Medicare Advantage and Part D plans, health care providers and pharmacies, and other interested parties.”
HHS Secretary Xavier Becerra was quoted in the release saying that “Under President Biden’s leadership, we will begin the process of negotiating lower prescription drug prices for millions of seniors and people with disabilities across the country. Thanks to the Inflation Reduction Act, we finally have the authority to get American families the lower prescription drug costs they deserve. Today we are releasing our plan for how we will implement Medicare drug price negotiation under this landmark law—and we will be transparent and aggressive in implementation every step of the way.”
