March 20, 2023
On Wednesday, March 15, 2023, President Joe Biden delivered remarks on his Administration's plan to lower prescription drug costs.
Among the efforts highlighted by President Biden is the Medicare Prescription Drug Inflation Rebate Program, which enforces inflation penalties on 27 drugs, a move that will reduce out-of-pocket drug costs for Medicare recipients by as much as $390 per dose, as reported on reuters.com.
The 27 drugs subject to these inflation penalties had their prices raised higher than the rate of inflation for the past quarter. Those drugmakers will have to pay the difference on the medications to Medicare.
This action will continue on a wider scale going forward. "Starting on April 1, Medicare beneficiaries will pay lower coinsurance for Part B drugs that raise prices faster than inflation," said White House Domestic Policy Advisor Susan Rice.
The Centers for Medicare and Medicaid Services (CMS) recently released initial guidance on the Medicare Prescription Drug Inflation Rebate Program, found here.
Additionally, the President's proposed FY2024 budget includes the expansion of Medicare's negotiation authority to increase the number of drugs selected for negotiation sooner after they launch. The budget proposal also includes provisions to cap the price of insulin at $35 a month for everyone, not just seniors.
In response to President Biden's call for insulin producers to cap their monthly costs, Eli Lilly and Novo Nordisk, two of the three largest producers of insulin in the U.S., have announced they were lowering insulin costs, ahead of any legislation mandating they do so.
A report released by the Department of Health and Human Services (HHS), Office of the Assistant Secretary for Planning and Evaluation (ASPE) showed that 3.4 million people with Medicare would have saved $234 million in out-of-pocket costs in 2021, an average of $70 per person, had the Inflation Reduction Act been in effect then.
As reported in a White House Fact Sheet, HHS expects the actual number of people who will benefit from these cost savings in 2023 to be larger than what the 2021 figures would have been.
Click here to access the White House Fact Sheet, here to access a video of President Biden's full speech, here to access a one-pager on Cost-Sharing for Medicare Enrollees on Insulin, and here to access a one-pager on out-of-pocket costs for Medicare Part D enrollees on covered vaccines.