Under President Biden’s prescription drug law, drug companies will pay rebates to the federal government for raising prescription drug prices faster than the rate of inflation
As part of President Biden’s historic Inflation Reduction Act, the nation’s new prescription drug law, for the first time ever, drug companies will pay rebates to Medicare when their prescription drug prices increase faster than the rate of inflation for certain drugs dispensed to people with Medicare.
Under the Medicare Prescription Drug Inflation Rebate Program, drug companies who raise prices faster than the rate of inflation will be required to pay rebates to the Medicare Trust Fund. Below is a timeline of key dates for implementing the Medicare Prescription Drug Inflation Rebate Program:
- October 1, 2022: Began the first 12-month period for which drug companies will be required to pay rebates to Medicare for raising prices that outpace inflation on certain Part D drugs.
- January 1, 2023: Began the first quarterly period for which drug companies will be required to pay rebates for raising prices that outpace inflation on certain Part B drugs.
- April 1, 2023: People with Traditional Medicare and Medicare Advantage may pay a lower coinsurance for certain Part B drugs with price increases higher than inflation.
- 2025: CMS intends to send the first invoices to drug companies for the rebates.
Read the full press release here.