Inflation Reduction Act cuts costs of 54 prescription drugs

Medicare Part B enrollees can expect to pay less for 54 different medications between October and December 2024 because of the Medicare Prescription Drug Inflation Rebate Program under the Inflation Reduction Act, according to a CMS press release.

Under IRA, the drugs in question qualify for the Medicare Prescription Drug Inflation Rebate Program because drug companies raised prices for each of them faster than the rate of inflation. Drugs included in the list treat conditions like cancer, osteoporosis and pneumonia.

"The President's lower cost prescription drug law continues to put money back in the pockets of seniors and people with disabilities," HHS Secretary Xavier Becerra stated publicly. "President Biden and Vice President Harris promised to lower prescription drug costs -- and they have delivered."

The Medicare Prescription Drug Inflation Rebate Program requires drug companies to pay a rebate if they raise the prices of certain drugs faster than the rate of inflation, according to CMS. Since April 2023, more than 100 drugs have qualified for the rebate program. In this latest round of qualifying medications, CMS estimates nearly 822,000 people with Medicare will see cost savings ranging from $1 to $3,854 each day.

For example, a patient taking the drug Kymriah, which is used to treat cancer, could save up to $3,000, the agency explained.

This news comes as part of the administration's overall effort to curb healthcare costs for consumers, particularly by lowering out-of-pocket drug costs. As part of the IRA, the Medicare Prescription Drug Inflation Rebate Program was designed to discourage drug price increases beyond the rate of inflation.

"The Biden-Harris Administration is dedicated to ensuring people with Medicare have access to their prescription drugs, and the Inflation Reduction Act continues to deliver on our goal to improve affordability," CMS Administrator Chiquita Brooks-LaSure said in the press release. "Discouraging price increases above the rate of inflation by drug companies and negotiating lower prices on some of the most expensive and most frequently used drugs in the Medicare program delivers on our promise to bring savings to Medicare enrollees."

This announcement follows other cost-cutting measures from the agency. Earlier this year, the White House finalized new prices for the 10 drugs selected for Medicare drug price negotiations. The administration said these lower prices could have saved the federal program $6 billion if they'd been in effect over the past year, signaling the potential cost savings going forward.

Overall, the newly negotiated drug prices range from 38% to 79% discounts off the list prices of 10 commonly prescribed drugs.

"Americans pay too much for their prescription drugs. That makes today's announcement historic," Becerra said at the time of the announcement. "For the first time ever, Medicare negotiated directly with drug companies and the American people are better off for it."

Sara Heath has covered news related to patient engagement and health equity since 2015.