Consumers get price rebates on 41 prescription drugs from Inflation Reduction law

The Department of Health and Human Services announced on March 26 that 41 prescription drugs available through Medicare Part B will cost less for consumers if their manufacturers raise prices higher than the rate of inflation. The department estimated that each year about 763,700 people currently on Medicare use at least one of the drugs affected.

“Thanks to President Biden’s lower cost prescription drug law, the cost of prescription drugs is coming down for people with Medicare. We are putting money back in the pockets of older Americans and people with disabilities instead of Big Pharma,” Secretary Xavier Becerra said in a statement.

The prices are being lowered in response to the Inflation Reduction Act that President Joe Biden signed into law in 2022. Under the law, drug companies are required to pay into the Medicare Supplementary Medical Insurance Fund if they raise prices for their products higher than is warranted by the standard rate of inflation. The companies will have to pay the excess over what the government has determined they should be charging. The fund is used to cover the costs of Medicare Part B and D coverage, including prescription drug benefits. The law was designed to lower the out-of-pocket cost for families, and companies face possible fines if they do not pay the rebate amount.

More than 2.1 million people in Michigan are enrolled in Medicare. In a December 2022 AARP poll of Michigan residents aged 50 and older, 57% expressed concern that they would not be able to afford prescription drugs over the next five years.

The Inflation Reduction Act faced unified opposition from Republicans in Congress when the legislation was being debated, and passed with only Democratic votes, including a tiebreaking vote in the Senate cast by Vice President Kamala Harris.

The Biden administration has criticized the fiscal year 2025 budget proposal released on March 20 by the House Republican Study Committee, which counts 179 of the current 218 Republicans in the majority among its members, for suggesting cuts to health care.

The plan calls for ending subsidies for many enrolled in Affordable Care Act (Obamacare) insurance plans and protections for those with preexisting conditions, and proposes converting Medicaid into a state-administered block grant program.

The White House estimated that if the budget proposal were adopted, more than 45 million people would lose access to health care coverage and over $4.5 trillion would be cut from the funding of health care programs.

“If Republican elected officials get their way, these proposals would become the law of the land and Americans would pay the price,” the White House said in a statement.