Bipartisan efforts to lower prescription drug costs remains a core focus for the US Congress. Effective October 1, 2024, the Centers for Medicare and Medicaid Services (CMS) has announced the follow-on cohort for its coinsurance savings program under the Medicare Prescription Drug Inflation Rebate Program.
Rebate Program
From October 1 to December 31, 2024, 54 Medicare Part B rebatable drugs will have an inflation-adjusted coinsurance rate equal to 20% of the inflation-adjusted payment amount. Alternatively stated, some Medicare enrollees will pay less for these 54 drugs because companies raised prices faster than the rate of inflation. For the drugs selected under the rebate program, CMS estimates that beneficiaries will receive coinsurance savings of as much as $1 to $3,854 per day.
The list of drugs selected for the rebate program is published by CMS through the Medicare Part B Quarterly Sales Pricing (ASP) files, with many drugs from the prior quarter remaining on the list through the end of the year.
As with the prior iteration, CMS intends to begin invoicing manufacturers for applicable 2023 and 2024 Part B inflation rates by no later than fall 2025.
Out-of-Pocket Caps
In conjunction with the rebate program updates, CMS reenforced its prior announcement that beginning in 2025 Part D enrollees will receive a $2,000 cap on annual out-of-pocket prescription drug costs, a substantial savings for enrollees as compared to the $3,500 cap available during calendar year 2024.
Key Takeaways
Through the rebate program and other drug pricing initiatives, the Biden administration has placed an emphasis on “discouraging price increases above the rate of inflation” for those high-cost drugs most commonly relied on by Medicare enrollees.
For more information on the coinsurance savings implemented through the Inflation Reduction Act and the Medicare Prescription Drug Inflation Rebate Program, see our previous blog post Medicare Part B Enrollees Will Save on 64 Newly Selected Drugs Under Inflation Rebate Program.
How We Can Help
Morgan Lewis lawyers are well suited to counsel drug manufacturers on complex federal and state government pricing and drug price reporting matters and can assist companies in navigating these complex issues.