The Biden administration has announced a plan to lower the costs of 64 prescription drugs by imposing inflation penalties on pharmaceutical companies. This move is expected to help make treatments more affordable for millions of Americans.
Under the proposed rule from the Centers for Medicare & Medicaid Services, drug manufacturers would have to pay the government if their prices for Medicare Part B drugs increase faster than inflation. The proposal would apply to drugs administered in doctors’ offices and outpatient settings, which include treatments for cancer, macular degeneration, rheumatoid arthritis, and eye conditions.
The administration estimates that these changes could save taxpayers about $2 billion a year. It could also directly result in lower copayments for about 1 million Medicare beneficiaries.
This step echoes the goal of President Joe Biden’s broader drug pricing proposal, which aims to negotiate lower prices for certain high-cost, brand-name drugs with no competition. This is part of the administration’s larger push for equity in healthcare and ensuring that access to life-saving medications is not limited by one’s ability to pay.
The proposed rule has been sent to the Office of Management and Budget for review. If approved, the drug pricing changes would go into effect in 2023. However, it could face legal challenges from the pharmaceutical industry that argues such measures are overly constrictive and discourage innovation.
Biden administration to lower costs for 64 drugs through inflation penalties on drugmakers
The Biden administration has announced a plan to lower the costs of 64 prescription drugs by imposing inflation penalties on pharmaceutical companies. This move is expected to help make treatments more affordable for millions of Americans.
Under the proposed rule from the Centers for Medicare & Medicaid Services, drug manufacturers would have to pay the government if their prices for Medicare Part B drugs increase faster than inflation. The proposal would apply to drugs administered in doctors’ offices and outpatient settings, which include treatments for cancer, macular degeneration, rheumatoid arthritis, and eye conditions.
The administration estimates that these changes could save taxpayers about $2 billion a year. It could also directly result in lower copayments for about 1 million Medicare beneficiaries.
This step echoes the goal of President Joe Biden’s broader drug pricing proposal, which aims to negotiate lower prices for certain high-cost, brand-name drugs with no competition. This is part of the administration’s larger push for equity in healthcare and ensuring that access to life-saving medications is not limited by one’s ability to pay.
The proposed rule has been sent to the Office of Management and Budget for review. If approved, the drug pricing changes would go into effect in 2023. However, it could face legal challenges from the pharmaceutical industry that argues such measures are overly constrictive and discourage innovation.
