Notably, in 2022 the U.S. Congress passed the Inflation Reduction Act (“IRA”), which includes, among other items, provisions regarding the following:
•Implementation of a Medicare Drug Price Negotiation Program (the “Medicare Drug Price Negotiation Program”). The Medicare Drug Price Negotiation Program requires the government to set prices for select high-expenditure drugs covered under Medicare Parts B and D. Starting in 2023 and 2026, the government is authorized to select Part D and Part B drugs, respectively, for inclusion in the Medicare Drug Price Negotiation Program, with established prices to go into effect for selected Part D drugs in 2026 and for selected Part B drugs in 2028, in each case absent certain disqualifying events.
•Medicare Inflation Based Rebates. The IRA includes measures requiring manufacturers to pay rebates where increases to the average sales price or average manufacturer price of drugs covered under Medicare Parts B and D, respectively, exceed the rate of inflation.
•Medicare Part D Program Redesign. The IRA implements changes to the Medicare Part D benefits to limit patient out-of-pocket drug costs and shift program liabilities from patients to other stakeholders, including health plans, manufacturers, and the government.
