CMS Leaves Important Questions Unanswered in Inflation Rebate Guidance

The Biden administration on Feb. 9 released the first round of guidance regarding the Medicare prescription drug inflation rebate program that’s included in the Inflation Reduction Act (IRA), which requires drugmakers to pay rebates to Medicare if they raise the price of drugs faster than the rate of inflation. One expert tells AIS Health, a division of MMIT, that the rebates should have minimal effects, if any, on premiums for Medicare Advantage (MA) plans with prescription drug coverage and stand-alone Prescription Drug Plans (PDPs), given the information that is currently available — although she observes that drugmakers may try to recoup their losses through more aggressive commercial plan rebate strategies.

The rebate program has already begun to phase in: Medicare prescription drug transactions starting in October 2022 are subject to rebates for both Part B and Part D drugs. However, CMS has yet to produce the regulations that will govern the rebate process.

© 2024 MMIT
Peter Johnson

Peter Johnson

Peter has been a reporter for nearly a decade. Before joining AIS Health, Peter covered a wide variety of topics in his hometown of Seattle, where he continues to live. Peter’s work has appeared in publications including The Atlantic and The Stranger. Peter attended Colby College.

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