After fining 27 pharmaceuticals earlier this year for price increases, the Biden administration said on Friday that it will apply inflation penalties on an additional 43 drugs for the third quarter of 2023. This, the agency said, would reduce prices for older Americans by as much as $449 per dosage.
Manufacturers of these 43 medications are responsible for compensating Medicare, the federal health insurance program for those over the age of 65, for the difference in cost caused by price increases that exceed the rate of inflation.
“People taking 43 of these drugs could pay less (in coinsurance) to access these important treatments, starting July 1,” Dr. Meena Seshamani, director for Medicare at the Centers for Medicare & Medicaid Services (CMS), told reporters.
The Medicare administration expects to begin billing pharmaceutical companies for rebates for both 2019 and 2020 in 2025.
The Inflation Reduction Act (IRA), which was signed into law by President Joe Biden, has a clause that penalizes pharmaceutical companies for charging Medicare patients price increases that exceed the rate of inflation.
For the second quarter of this year, Biden stated in March that his government would impose inflation penalty on 27 medications. For the next quarter of 2023, we’ll be using a fresh list of 43 instead.
The White House released a fact sheet listing the pharmaceuticals that would be subject to the inflation penalty in the third quarter, including AbbVie’s (ABBV.N) blockbuster arthritis treatment Humira and Seagen’s (SGEN.O) targeted cancer therapy Padcev for the second time.