HHS adds Humira, other drugs to list of drugs subject to inflation rebates

Photo: Shana Novak/Getty Images

The White House and the Department of Health and Human Services have announced the names of the first set of Part B prescription drugs that will be subject to Medicare inflation rebates because they raised their prices faster than inflation.

One of them is Humira, the AbbVie offering that treats arthritis. President Biden's drug law includes checks to ensure that prescription drug companies have to pay back Medicare if they raise prices on seniors at a higher rate than inflation.

The other drug are:

• Abelcet
• Akynzeo
• Atgam
• Aveed
• Bicillin C-R
• Bicillin L-A
• Carnitor
• Cytogam
• Elzonris
• Fetroja
• Flebogamma DIF
• Folotyn
• Fragmin
• Leukine
• Minocin
• Mircera
• Nipent
• Padcev
• Rybrevant
• Signifor LAR
• Sylvant
• Tecartus
• Winrho SDF
• Xiaflex
• Yescarta
• Zipere

WHAT'S THE IMPACT?

Starting in April, some Medicare beneficiaries will have lower coinsurance for the 27 prescription drugs that raised prices faster than inflation in the last quarter of 2022. Seniors may see their out-of-pocket costs for these drugs decrease from $2 to as high as $390 per average dose starting April 1, said HHS.

In addition to making drug companies pay Medicare back for increasing their prices faster than inflation, this provision of the Inflation Reduction Act discourages other companies from doing the same, with the goal of reigning in excessive drug price hikes year-over-year.

According to a recent report from HHS, 1,200 prescription drugs increased their prices faster than inflation in 2021.

"The ability to negotiate lower prescription drug prices is one of the most powerful tools Medicare has to lower healthcare costs for American seniors and families," HHS said in an announcement. To that end, President Biden last week called for expanding Medicare's negotiating authority to cover more drugs, sooner after they launch, when he released his FY2024 budget.

THE LARGER TREND

Relatedly, HHS released a new report finding that 3.4 million people with Medicare would have saved $234 million in out-of-pocket costs in 2021 – an average of $70 per person – had the Inflation Reduction Act been in effect then. HHS expects the actual number of people who will benefit from these cost savings in 2023 will be larger than the 2021 figures because removing out-of-pocket costs will make the vaccines more affordable for the 51 million Medicare beneficiaries enrolled in a Part D plan.

HHS released data earlier this year that show that 1.5 million seniors and others on Medicare with diabetes would have saved, on average, $500 each per year on insulin if the Inflation Reduction Act's $35 cap on a month's supply of insulin had been in effect in 2020.

The insulin provisions of the law went into effect January 1 for Medicare Part D. Starting July 1, under Medicare Part B, beneficiary cost-sharing will be limited to $35 for a month's supply of insulin. 

Researchers estimate that 1.5 million people with Medicare would have benefited from the new insulin cost-sharing limits if they had been in effect in 2020, with total savings to beneficiaries of about $734 million in Part D and $27 million in Part B – an average savings of approximately $500 for those Medicare beneficiaries.
 

Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com