New details by the Centers for Medicare and Medicaid Services (CMS), released on February 8, 2023, answered some pharmaceutical companies’ questions about the Inflation Reduction Act (IRA) while raising new ones. The announcement detailed how drugmakers must comply with new rules that mandate rebates to Medicare if they increase the price of specific drugs faster than the rate of inflation. The Kaiser Family Foundation found in February 2022 that prices rose more quickly than inflation for half of all drugs covered by Medicare in 2020, which means many drug makers will be impacted.
The guidance documents were open for public feedback through March 11. Some of the topics CMS was seeking input on include:
- Determining how to calculate the number of drug units of drugs for which the rebates are applicable.
- Deciding on how much to decrease rebates if there is a shortage of drugs or severe disruptions to drug supply chains.
- Making sure rebate payments are accurate.
- Calculating how to impose civil monetary penalties on manufacturers of Part D drugs that don’t pay required rebates.
Additionally, in April 2023, the beneficiary coinsurance percentage will be lowered based on the inflation-adjusted payment amount calculated for Part B drugs. Due to time constraints, this information was issued as final guidance.
Comments received by March 11, 2023, will be considered for the revised guidance. CMS anticipates issuing revised guidance later in 2023 for the Medicare Prescription Drug Inflation Rebate Program.
How Model N can help
At Model N, we are committed to supporting drug manufacturers in navigating and adapting to rapid regulatory changes. We will release updates and patches designed specifically to address provisions in the Inflation Reduction Act as final guidance becomes available to ensure all of our customers are set up for success.
Connect with Model N to learn how we can support your team, and keep an eye on our blog for more IRA updates.
