U.S. government to start imposing inflation penalties on drugmakers in
2025
Send a link to a friend
[February 10, 2023]
WASHINGTON (Reuters) -The U.S. government will begin imposing
penalties in 2025 on drug companies that charge its Medicare program
prices that rise faster than inflation, the Centers for Medicare &
Medicaid Services said on Thursday.
The agency issued initial guidance on how it will implement a provision
in President Joe Biden's signature Inflation Reduction Act that
penalizes drugmakers for raising prices faster than inflation.
"The Medicare Prescription Drug Inflation Rebate Program will require
drug companies with excessive increases in drug prices to pay rebates to
Medicare," CMS Administrator Chiquita Brooks-LaSure said in a statement.
Companies that raise prices higher than the inflation rate will be
required to pay Medicare the difference in the form of a rebate. Those
that fail to pay the rebate will face a penalty equaling 125% of the
rebate amount.
Medicare began examining the price increases in October 2022 for
Medicare Part B drugs, often used in the hospital, that are complicated
biologic drugs or drugs with only one manufacturer.
[to top of second column]
|
Used blister packets that contained
medicines, tablets and pills are seen, in this picture illustration
taken June 30, 2018. REUTERS/Russell Boyce/Illustration
Price increases for half of all
drugs covered by Medicare outpaced inflation from 2019 to 2020,
which averaged 1% that year. A third of those had price jumps of
over 7.5%.
CMS said it would consider comments received by March 11 for revised
guidance it plans to issue later this year.
Starting April 1, consumer out-of-pocket costs will be based on the
inflation adjusted drug price.
(Reporting by Ahmed Aboulenein and Patrick Wingrove in
WashingtonEditing by Jonathan Oatis and Matthew Lewis)
[© 2023 Thomson Reuters. All rights
reserved.]This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |