On August 7, 2022, the U.S. Senate passed the Inflation Reduction Act of 2022, which includes some of the most significant drug pricing-related changes since the passage of the Medicare Prescription Drug Improvement and Modernization Act of 2003. The legislation is expected to pass without modification by the House of Representatives and to be signed by President Biden shortly thereafter.
The healthcare-related portions of the bill introduce many important changes, most notably allowing the Medicare program to negotiate with pharmaceutical companies for reduced prescription drug prices under Medicare Part B and Medicare Part D (commonly known as the Prescription Drug Benefit for America’s senior population) for certain single-source drugs, or rather those drugs and biologicals without generic or biosimilar competitors. The bill will also require drug makers to pay the government a rebate for any drug whose price increases faster than the pace of inflation. It also modifies several aspects of the Part D benefit to cap Medicare beneficiaries’ out-of-pocket costs.
Heath Ingram, Matt Wetzel and Roger Cohen provide a high-level summary of these provisions and other important considerations in this client alert.
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