President Joe Biden delivers remarks on Social Security and Medicare at the University of Tampa in Florida on Feb. 9, 2023.
Jonathan Ernst | Reuters
U.S. President Joe Biden will announce on Thursday that 48 new drugs may be subject to rebates, the White House said, a move that would reduce out-of-pocket costs for Medicare recipients by as much as $2,786 per average dose.
Biden’s signature Inflation Reduction Act (IRA) includes a provision to penalize drugmakers for charging prices that rise faster than inflation for people on Medicare, the government program for those age 65 and older and the disabled.
For the last quarter of 2023, prices of 48 Medicare Part B drugs rose faster than inflation, according to the White House, which also said some big pharmaceutical companies raised prices of certain medications every quarter through the year.
These drugs may be subject to inflation rebates in the first quarter of 2024 as a result of the IRA, which Biden, a Democrat, signed last year.
In total, 64 drugs had prices that increased faster than inflation over the last four quarters, the White House said in a statement.
Prices of some drugs such as Signifor, used to treat an endocrine disorder, have risen faster than inflation every quarter since the IRA’s rebate provision came into effect.
The IRA aims to save $25 billion annually by 2031 by requiring drugmakers to negotiate the prices of selected expensive drugs with the U.S. Centers for Medicare and Medicaid Service, which oversees Medicare.
The Biden administration last week announced it was setting new policy that will allow it to seize patents for medicines developed with government funding if it believes their prices are too high.
