Biden administration names first round of drugs to face Medicare rebate penalties

The Biden administration has released its first list of nearly 30 drugs covered by Medicare that will be subject to the penalties included in the Inflation Reduction Act, because their prices increased faster than the rate of inflation.

Under the act, drug manufacturers are required to pay rebates to the federal government if the price of medications covered by Medicare Part B and Part D increase at a rate that exceeds inflation. This measure was included as a way of limiting drug costs, along with price caps that were included in the legislation for seniors.

The Department of Health Human Services released a list of 27 drugs on Wednesday that will be subject to the rebate penalty.

Medications on the list included the arthritis treatment Humira as well as cancer treatments like Rybrevant, which is indicated for certain cases of non-small cell lung cancer and was first approved in 2021.

“Seniors may see their out-of-pocket costs for these drugs decrease by $2 to as high as $390 per average dose starting April 1st,” the White House said in a statement.

In a press briefing, Centers for Medicare and Medicaid Services Administrator Chiquita Brooks-LaSure said her agency will invoice the drugmakers for these rebates beginning in 2025.

“The Medicare prescription drug inflation rebate program is strengthening Medicare by making prescription drugs affordable for millions of people and discouraging drug companies from increasing prices faster than inflation,” Brooks-LaSure said. “It’s also protecting Medicare for our children and grandchildren.”

The release of this list comes shortly before President Biden is set to speak in Las Vegas on lowering drug costs.