The Biden administration announced that it will impose inflation penalties on 64 prescription drugs for the third quarter of this year, resulting in lower costs for certain older Americans enrolled in Medicare, CNBC reported.
This will be part of President Joe Biden's health-care agenda and reelection platform for 2024, aimed at reducing U.S. drug prices. The key provision of Biden's Inflation Reduction Act mandates that drugmakers pay rebates to Medicare if they increase the cost of a medication faster than the inflation rate.
This initiative is separate from another law provision that allows Medicare to negotiate lower prescription drug prices with manufacturers.
On average, Americans pay two to three times more than patients in other developed nations for prescription drugs, according to the administration.
Biden's Costs for Prescription Drugs
Under the new policy, some Medicare Part B patients will pay a lower coinsurance rate for the 64 drugs affected by the inflation penalties, effective from July 1 to Sept. 30.
These drugs, which saw price hikes exceeding inflation rates, treat conditions such as cancer, certain infections, and osteoporosis.
The administration's release cited that some patients could save as much as $4,593 per day if they use these drugs during the quarter, considering that more than 750,000 Medicare patients use these medications annually.
Neera Tanden, White House domestic policy advisor, emphasized that the Inflation Reduction Act protects seniors from significant price hikes by Big Pharma. The Centers for Medicare & Medicaid Services plans to send the first invoices for rebates owed by drugmakers to the program in 2025.
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