The Inflation Reduction Act of 2022 requires drug companies to pay rebates to Medicare when prescription drug prices increase faster than the rate of inflation for certain drugs. This inflation rebate applies to Medicare Part B rebatable drugs, which are single-source drugs and biological products, beginning January 1, 2023. See our previous blog post discussing CMS guidance on the Medicare Prescription Drug Inflation Rebate Program here.
Under the Rebate Program, the beneficiary coinsurance rate will be 20% of the inflation-adjusted payment amount for rebatable drugs and biologics, which will be less than what the beneficiary would pay in coinsurance otherwise. On March 15, 2023, the Centers for Medicare & Medicaid Services (CMS) announced 27 prescription Part B drugs which will have an adjusted coinsurance rate based on the inflation-adjusted payment amount. These adjusted coinsurance rates will apply for the time period of April 1 to June 30, 2023. You can find the list of the 27 prescription drugs here.
As information in the Average Sales Price (ASP) quarterly drug pricing files is updated, the price of Part B rebatable drugs with a coinsurance adjustment may vary over time. Starting on April 1, 2023, and for each quarter thereafter, CMS will specify whether a coinsurance adjustment applies to a Part B rebatable drug for a calendar quarter in the quarterly ASP public files on the CMS website. The ASP public files may be found here.
We will continue to provide updates on developments related to the programs being implemented under the Inflation Reduction Act, as regulatory guidance will continue to be issued at a fast pace during this first implementation year of both the Medicare drug Rebate Program and the price negotiation program.