Under the Inflation Reduction Act, people with Medicare may pay a lower coinsurance for some Part B drugs if the drug’s price increases faster than the rate of inflation.

March 27, 2024 - The U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), on Tuesday announced 41 drugs available through Medicare Part B will have a lowered Part B coinsurance rate from April 1 – June 30, 2024, if the drug company raises prices faster than the rate of inflation.  An estimated 763,700 people with Medicare use one or more of these drugs annually.

Because of the President’s lower cost prescription drug law, the Inflation Reduction Act, which establishes the Medicare Prescription Drug Inflation Rebate Program, some people with Medicare who use these drugs during that time period may save between $1 and $3,575 per average dose depending on their individual coverage.

“Thanks to President Biden’s lower cost prescription drug law, the cost of prescription drugs is coming down for people with Medicare. We are putting money back in the pockets of older Americans and people with disabilities instead of Big Pharma,” said HHS Secretary Xavier Becerra. “President Biden made lowering prescription drug costs for Americans a top priority, and he has delivered.  We will continue to use every lever we have to lower health care costs for more Americans.”

The Inflation Reduction Act requires drug companies to pay rebates to Medicare when prices increase faster than the rate of inflation for certain drugs. CMS intends to begin invoicing prescription drug companies for rebates owed to Medicare no later than fall 2025. The rebate amounts paid by drug companies will be deposited in the Federal Supplementary Medical Insurance Trust Fund, which will help ensure the long-term sustainability of the Medicare program for future generations. 

“The Biden-Harris Administration remains committed to lowering drug prices for everyone – and discouraging price increases above the rate of inflation by drug companies is a key part of this effort,” said CMS Administrator Chiquita Brooks-LaSure. “All people should be able to afford their medication, and the Inflation Reduction Act continues to deliver on this promise.

The Medicare Prescription Drug Inflation Rebate Program is just one of the Inflation Reduction Act’s prescription drug provisions aimed at lowering prescription drug and health care costs. In addition to this program, the law expanded eligibility for full benefits under the Low-Income Subsidy program (LIS or “Extra Help”) under Medicare Part D at the beginning of this year. Nearly 300,000 people with low and modest incomes are now benefiting from the program’s expansion. A comprehensive public education campaign is underway to reach the more than three million people who are likely eligible for the program but not yet enrolled. In addition, as of January 1, 2024, some people enrolled in Medicare Part D who have high drug costs have their annual out-of-pocket costs capped at about $3,500. In 2025, all people with Medicare Part D will benefit from a $2,000 cap on annual out-of-pocket prescription drug costs.

More information is available here on - PDF the Medicare Prescription Drug Inflation Rebate Program.

Learn more about the Medicare Prescription Drug Inflation Rebate Program including a fact sheet on the 41 Part B drugs with a coinsurance reduction for the quarter April 1 – June 30, 2024.

More information and helpful resources about the Inflation Reduction Act and how it is helping lower costs for people with Medicare can be found at LowerDrugCosts.gov.
Source: HHS