HHS Unveils Key Dates for Medicare Drug Price Negotiations
WASHINGTON — When the Inflation Reduction Act became law last year, it empowered the Health and Human Services secretary, for the first time ever, to begin negotiating certain prescription drug prices with drug manufacturers. The prices would go into effect in 2026.
On Monday, both the Centers for Medicare & Medicaid Services and the Department of Health and Human Services announced key dates in the process they contend will lower prescription drug prices for millions of seniors and people with disabilities across the country.
The biggest difference in the timelines is the CMS memo details multiple comment opportunities for members of the public, people with Medicare and consumer advocates, pharmaceutical manufacturers, Medicare Advantage and Part D plans, health care providers and pharmacies, and other interested parties.
“We cannot do this important work alone and will engage with the public early and often,” CMS Administrator Chiquita Brooks-LaSure offered by way of explanation.
“We are proactively seeking feedback and insights from a broad range of interested parties throughout implementation of this historic law,” she said.
Key dates for implementation include:
- By Sept. 1, 2023, CMS will publish the first 10 Medicare Part D drugs selected for the Medicare Drug Price Negotiation Program.
- The negotiated maximum fair prices for these drugs will be announced by Sept. 1, 2024, and prices will be in effect starting Jan. 1, 2026.
- In future years, CMS will select for negotiation 15 more Part D drugs for 2027, 15 more Part B or Part D drugs for 2028, and 20 more Part B or Part D drugs for each year after that, as outlined in the Inflation Reduction Act.
“Public feedback is critical to our ability to successfully implement this law and ensure access to innovative, affordable therapies and treatments,” said Dr. Meena Seshamani, M.D., Ph.D., CMS deputy administrator and director of the Center for Medicare. “Through this detailed timeline, we offer stakeholders the predictability they need to contribute to our implementation efforts. We want the public to know when and how they can make their voices heard on forthcoming policies.”
Provisions of the Inflation Reduction Act already in effect:
- Free vaccines: Recommended preventive vaccines are free of charge for people with Medicare prescription drug coverage as of Jan. 1, 2023. Most notably, these vaccines include shingles and Tdap. This will provide significant savings for people enrolled in Medicare prescription drug plans, as the shingles vaccine alone can cost up to a few hundred dollars.
- Insulin cap: Cost-sharing for a month’s supply of each covered insulin is capped at $35 and there is no deductible for these products for people with Medicare prescription drug coverage as of Jan. 1, 2023. More than a million Medicare beneficiaries with diabetes will benefit from this $35 cost-sharing cap per month’s supply of each covered insulin.
Currently, nearly a quarter of Medicare beneficiaries taking insulin spend more than $70 a month on insulin.
- Rebates required from drug manufacturers’ increasing prices faster than inflation. Manufacturers will need to pay rebates to Medicare if they increase their prices for certain drugs at a rate that exceeds the rate of inflation. The first rebate period began Oct. 1, 2022, in Part D and Jan. 1, 2023, in Part B.
- ACA subsidies: During Marketplace Open Enrollment this year, more people will qualify for help purchasing affordable high-quality health coverage.
- Biosimilars: On Oct.1, 2022, CMS implemented the Medicare Part B payment changes, for certain qualifying biosimilars, to temporarily increase payment to providers who administer these products, in order to encourage price competition and the use of biosimilars and their reference biological products.
A biosimilar is a biological product that is highly similar to and has no clinically meaningful differences from an existing FDA-approved reference biological product. Many biosimilars are life-saving medicines that treat conditions such as diabetes, cancer and immune disorders.
The goal of this provision is to increase access to biosimilars, as well as to encourage competition between biosimilars and reference biological products, which may, over time, lower drug costs and lead to savings for beneficiaries and Medicare.
The more detailed CMS timeline can be found here.