Saturday, July 13, 2024

Lower Costs for 64 Medicare Part B Drugs Announced by HHS

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Lower cost for 64 drugs available through Medicare Part B has been announced by the U.S. Department of Health and Human Services (HHS) through the Centers for Medicare & Medicaid Services (CMS). From July 1, 2024, to September 30, 2024, the coinsurance rates for these drugs will be reduced because the respective drug companies raised their prices faster than the rate of inflation. Over 750,000 Medicare beneficiaries use these drugs annually for conditions such as osteoporosis, cancer, and infections.

White House Domestic Policy Advisor Neera Tanden highlighted the significance of this development during a keynote address at the Center for American Progress. She emphasized the Biden-Harris Administration’s commitment to lowering healthcare and prescription drug costs for Americans. “Without the Inflation Reduction Act, seniors were completely exposed to Big Pharma’s price hikes. Not anymore. Thanks to President Biden and the new Medicare inflation rebate program, seniors are protected and benefitting from lower Part B drug costs,” Tanden said.

HHS Secretary Xavier Becerra echoed these sentiments, stating, “President Biden’s Medicare prescription drug rebate program is putting money back in the pockets of seniors and people with disabilities. President Biden made lowering prescription drug costs for Americans a top priority, and he is delivering on that promise. Our work is not complete, and we will continue to fight for lower healthcare costs for all Americans.”

Medicare Prescription Drug Inflation Rebate Program Yields Significant Savings for Seniors

The Medicare Prescription Drug Inflation Rebate Program, part of the Inflation Reduction Act, allows for significant savings. Medicare users of the 64 affected drugs could save between $1 and $4,593 per day during the specified period. CMS Administrator Chiquita Brooks-LaSure noted, “Everyone should be able to afford their medication, and the Inflation Reduction Act continues to deliver on this goal to improve affordability. Discouraging drug companies from price increases above the rate of inflation is a key part of this effort, and CMS continues to implement the law to bring savings to people with Medicare.”

For example, Padcev, a drug used to treat advanced bladder cancer, has seen price increases outpacing inflation each quarter since the Part B inflation rebate program began. Consequently, seniors and other Medicare beneficiaries have experienced lowered coinsurance costs, potentially saving up to $1,181 between April 1, 2023, and March 31, 2024, depending on their coverage and treatment plan. Similarly, Crysvita, which treats a rare genetic disorder causing impaired growth, muscle weakness, and bone pain, may have saved beneficiaries up to $765 over a similar period.

The Inflation Reduction Act encompasses several provisions to lower prescription drug costs. In addition to the rebate program, the law expanded eligibility for full benefits under the Low-Income Subsidy program (LIS or “Extra Help”) under Part D at the beginning of 2024. This expansion has already benefited nearly 300,000 individuals with low and modest incomes. A comprehensive public education campaign is also underway to inform the more than three million potentially eligible individuals who are not yet enrolled.

Medicare

Medicare Part D Caps Out-of-Pocket Drug Costs Under Inflation Reduction Act

As of January 1, 2024, some Medicare Part D enrollees with high drug costs have their annual out-of-pocket expenses capped at approximately $3,500. By 2025, all Medicare Part D enrollees will benefit from a $2,000 cap on annual out-of-pocket prescription drug costs.

The Inflation Reduction Act mandates that drug companies pay rebates to Medicare when their prices increase faster than the rate of inflation for certain drugs. CMS plans to start invoicing these companies for the rebates by fall 2025. The rebate payments will be deposited into the Federal Supplementary Medical Insurance Trust Fund, helping ensure the long-term sustainability of the Medicare program for future generations.

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The HHS announcement of cost savings for 64 prescription drugs under the Medicare rebate program is a significant step toward reducing the financial burden of medication on older adults and those with disabilities. By implementing the Inflation Reduction Act’s provisions, the Biden-Harris Administration aims to ensure that essential medications are affordable for all Americans, ultimately improving access to necessary treatments and enhancing the quality of healthcare nationwide. As the CMS continues to enforce these measures and gather additional data, further improvements in the affordability and accessibility of prescription drugs are anticipated.

 

Resource: Health and Human Services, June 26, 2024

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