Significant Drug Pricing Reform Measures in the Inflation Reduction Act of 2022 – Life Sciences Perspectives
Significant Drug Pricing Reform Measures in the Inflation Reduction Act of 2022
On August 16, President Biden signed the Inflation Reduction Act of 2022 into law, which includes some of the most significant drug pricing-related changes since the passage of the Medicare Prescription Drug Improvement and Modernization Act of 2003.
The healthcare-related portions of the law introduce many important changes, most notably allowing the Medicare program to negotiate with pharmaceutical companies for reduced prescription drug prices under Medicare Part B and Medicare Part D (commonly known as the Prescription Drug Benefit for America’s senior population) for certain single-source drugs, or rather those drugs and biologicals without generic or biosimilar competitors. The law will also require drug makers to pay the government a rebate for any drug whose price increases faster than the pace of inflation. It also modifies several aspects of the Part D benefit to cap Medicare beneficiaries’ out-of-pocket costs.