- The Biden administration on Wednesday announced the first set of prescription drugs to face penalties for their pharmaceutical makers raising prices within Medicare faster than the rate of inflation.
- The list of 27 drugs includes AbbVie’s top-selling inflammatory disease drug Humira as well as Seagen’s bladder cancer drug Padcev and Gilead’s cancer cell therapies Yescarta and Tecartus. Five Pfizer drugs are on the list — the most of any drugmaker — but they are older, lower revenue products.
- Drugmakers won’t have to pay the rebates until 2025, White House officials said. The list is being published five months before the first drugs subject to Medicare price negotiations will be announced.
The rebates are some of the first reforms to kick in from last year’s Inflation Reduction Act, which was in part aimed at reducing drug costs. Drugmakers must pay back to Medicare a rebate for price hikes they took that were greater than inflation — limits that started in October for certain self-administered Part D drugs and in January for certain physician-administered Part B drugs.
The first list of rebates announced Wednesday is for Part B drugs. It includes older medicines such as heparin-based anticoagulants, anti-infectives and immunoglobulins for severe anemia, as well as a few more well-known medicines like Humira and Padcev.
For Part B drugs, CMS calculates average prices on a quarterly basis, while for Part D drugs average prices are calculated over one-year periods that begin in October.
CMS has until Sept. 30, 2025 to invoice drugmakers for rebates owed for Part B drug price increases in 2023 and 2024. The deadline to invoice for Part D drug price rebates is Dec. 31, 2025.
But Medicare participants will not have to wait until 2025 to begin saving on the 27 drugs marked for rebates. Some of the program’s enrollees, depending on their coverage, will begin to pay less out of pocket for the drugs starting April 1, CMS said. That’s because of adjustments that will be made to coinsurance rates, which could result in per-dose savings between $2 and $390 depending on individual coverage plans, according to the agency.
The IRA also allows Medicare to negotiate prices for top-selling, single-source drugs, starting with 2026 prices for 10 drugs selected by the Centers for Medicare and Medicaid Services, to be published on Sept. 1. Biden has proposed doubling that number to an initial 20 and a total of 300 by 2033 in his fiscal 2024 budget request, a proposal that is unlikely to pass the split Congress.
Notable drugs included in CMS' list
|Padcev||Seagen, Astellas||Bladder cancer|
|Xiaflex||Endo Pharma||Dupuytren’s contracture, Peyronie’s disease|
|Reybrevant||Johnson & Johnson||Lung cancer|