Wyden Hails Start of Cost Containment Measures for Prescription Drugs Covered by Medicare
Beginning This Week, Prescription Drugs Sold at Prices Higher than Inflation Will Be Subject to a Rebate Back to Medicare
Washington, D.C. – Senate Finance Committee Chair Ron Wyden, D-Ore., today hailed the start of several of the Inflation Reduction Act’s prescription drug provisions, in particular the policy that will force drug companies to pay a rebate back to Medicare if the price of a product rises faster than the rate of inflation.
“Starting this week, there is finally accountability for Big Pharma’s indiscriminate price gouging,” Wyden said. “Seniors and taxpayers shouldn’t be forced to foot the bill while Big Pharma raises prices faster than the cost of living every year. This step is just the beginning of a seismic shift in the relationship between Big Pharma and taxpayers.”
October 1st marks the beginning of the one-year period that the Centers for Medicare & Medicaid Services (CMS) will use to determine the annual manufacturer price for every unit of a drug sold in Medicare Part D. After a year, that annual price will be compared to a benchmark price from a prior year. If the annual manufacturer price is higher than the benchmark price, a manufacturer will owe a rebate of the difference back to Medicare.
A similar rebate will go into effect for Medicare Part B at the beginning of 2023.
This week also marks the beginning of another policy aimed at lowering Medicare costs. The Inflation Reduction Act includes an increased payment for doctors for prescribing biosimilars, which are generally less expensive than their biologic counterparts. A biologic is a medication developed from biological sources. More information about this policy can be found here.
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