Important Provisions from the Inflation Reduction Act Have Gone Into Effect, Notably the Penalty for Drug Companies that Increase Prices Faster Than Inflation
Finance Chairman Asks CMS for Details on When and How the Medicare Part B and Part D Inflation Rebates Will Be Implemented
Washington, D.C. – Senate Finance Committee Chair Ron Wyden, D-Ore., asked the Biden administration to share key information with the public about the implementation of the Inflation Reduction Act’s drug pricing provisions, specifically the price gouging penalties on drug companies known as inflation rebates, which apply to Medicare Parts B and D.
“I write today to inquire about CMS’s progress towards implementing the Medicare inflation rebate provisions. This core component of the IRA’s drug pricing reforms has already started to take effect. The Finance Committee will be paying close attention to how the inflation rebate provisions work to lower prices for seniors and hold manufacturers accountable if they continue to raise prices beyond the rate of inflation,” Wyden wrote. “The information requested is critical to ensuring that Medicare beneficiaries understand the broad reach of the IRA and the inflation rebate provisions that intend to protect them.”
The letter, sent to Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure, comes as drug companies announced price increases on at least 872 drugs since January 1. In a recent report from the Department of Health and Human Services (HHS), more than 3,000 drugs saw a price increases in 2022. Between July 2021 and July 2022, price increases on 1,216 drugs outpaced inflation, with an average price increase of 32 percent.
The letter asks CMS to publicize details on how these provisions will be implemented, including a distinct timeline for the Part B and Part inflation rebates, as well as clear information to understand how the inflation rebates will be calculated and collected.
The full letter can be found here.