US Inflation Reduction Act Places More Financial Liability on Insurers and Drugmakers

Speakers at a panel at the 2023 Specialty Pharmacy Summit in Las Vegas, Nevada discussed how provisions in the Inflation Reduction Act, passed in the US last year, would pass more liability onto drugmakers and payers. One reason for this are inflation-based rebates that drugmakers must pay if they raise the price of drugs higher than inflation for Medicare Part B and D plans.

According to Skyler Jeremias, “Inflation-based rebates have been in effect for Part B plans since January 2023 and will be expanded for Part D plans in October 2023. Omar Hafez, managing director at Avalere, argued that although the criteria used to determine rebates will differ between Part B and Part D plans, one of the unintended consequences of this action could be that drug manufacturers may launch their products at higher prices to make up for what they will pay in rebates.”

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(Source: AJMC, May 2^nd, 2023)