The Department of Health and Human Services (HHS) has released a 43-drug list of the Medicare Part B prescription treatments that must repay the program for raising prices above the rate of inflation.
The second quarterly list takes effect in July and is an expansion over the 20 price-capped drugs from April through June. According to HHS, the rebates could save Medicare beneficiaries taking the treatments anywhere from $1 to $449 per average dose in out-of-pocket costs.
“The Medicare Prescription Drug Inflation Rebate Program is a critical way to address long-term price increases by drug companies, and [the Centers for Medicare and Medicaid Services (CMS)] is continuing our work to make prescription drugs more affordable for people with Medicare,” CMS Administrator Chiquita Brooks-LaSure said in a release.
The full list of prescription drugs and biological products with adjusted coinsurance amounts for July 1 to Sept. 30 is available here (PDF).
Of note, CMS said the list could be adjusted before or after July 1 based on public feedback notifying the agency of any potential discrepancies, as was the case during the program’s inaugural quarter when a highly publicized list of 27 drugs was later trimmed down to 20.
Coinciding with the quarterly list was a new report from HHS’ Office of the Assistant Secretary for Planning and Evaluation (ASPE) outlining several factors that drove up the $33 billion in Part B drug spending from 2008 to 2021.
Among ASPE’s findings was a 9.2% average annual increase in Part B drug spending per enrollee, which the office noted was over three times Part D’s 2.6% increase and almost four times as much as the 2.4% per capita annual increase in prescription drug spending across all payers.
Much of the Part B spending was concentrated on a small number of products, with the top 20 drugs accounting for 53% of spending. Spending in hospital outpatient departments also jumped from 23% to 41%, according to the report, while biologics alone were responsible for 89% of drug spending growth across the study period. By 2021, cancer drugs accounted for more than half of all Part B drug spending.
“The incentives associated with the current payment methodology are generally not consistent with the provision of high-value care to beneficiaries,” ASPE wrote in the report. “The direct payment to providers of [average sales price plus 6%] may not encourage providers and suppliers to obtain the lowest possible acquisition prices for their drugs. When there are therapeutic alternatives available, the current methodology is not consistent with value-based purchasing.”
ASPE added that “several” provisions in the Inflation Reduction Act aim to realign drug prescription incentives with value.
Medicare drug discounts enacted under the Inflation Reduction Act have been heavily touted by President Joe Biden as a major victory against the pharma industry’s “exorbitant profits at the expense of the American people.”
Outside of the immediate rebates, the administration is also targeting 2026 for the implementation of another Inflation Reduction Act-permitted price control, the Medicare Drug Price Negotiation Program.
In mid-March, the administration released initial guidance on how it would select and negotiate “maximum fair prices” for up to 10 Medicare Part D drugs, with more products to follow in later years. That process was challenged earlier this week by major drugmaker Merck & Co., which alleged in a lawsuit that the negotiation setup is a violation of the Fifth Amendment.