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Medicare Prescription Drug Rebate Rule


The Inflation Reduction Act of 2022 is a comprehensive legislative package encompassing healthcare, tax, and climate change provisions. The law introduces measures to decrease drug spending by the federal government and lower prescription drug costs for individuals enrolled in Medicare.

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In mid-March 2023, the Department of Health and Human Services (HHS) announced the first set of Medicare Part B covered prescription drugs to be impacted by provisions made within this legislation. This list will be updated each quarter to add or remove drugs based on the manufacturer’s compliance with the pricing standards. These provisions allow for lower drug coinsurance on these specific drugs due to high manufacturer price increases over the allotted limit.

Below we review the implications of the Inflation Reduction Act and how you may be affected if prescribed one of the qualifying drugs.

What is the Medicare Prescription Drug Rebate Rule?

The Medicare prescription drug rebate rule requires drug manufacturers to pay rebates (or penalties) to Medicare if they increase the cost of drugs used by Medicare beneficiaries at a higher rate than inflation. This rebate will lessen the coinsurance amount required by the Medicare enrollee when receiving a drug covered by Medicare Part B

The Medicare inflation rebate provision uses 2021 as the baseline year for determining price changes relative to inflation, and the current drug list is valid from July 1, 2023, to September 30, 2023. From there, the average inflation rate will determine which drugs are eligible for the penalty.

If prescribed an eligible drug, your typical 20% Medicare Part B copayment amount will be reduced.

Which Drugs Are Eligible for the Drug Rebate Penalty?

The first set of adjusted drugs was comprised of 27 medications from several manufacturers. The current drug list almost doubles the first, with 43 drugs being eligible for coinsurance reduction. If you receive any of these 27 prescription drugs, your out-of-pocket costs will reduce beginning July 1, 2023. On average, seniors prescribed a medication eligible for a rebate will save anywhere from $1 to as much as $499 per dose.

In addition to imposing a penalty on companies for raising their prices more quickly than inflation, this Medicare drug rebate rule steers other companies from doing the same to curb excessive drug price increases year after year.

According to a recent HHS study, 1,200 prescription drugs increased their prices more quickly than inflation in 2021. The goal of the rebate rule is to reduce this number significantly and reduce spending on drugs for Medicare enrollees.

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The 43 drugs impacted include:

  • Abelcet
  • Adcetris 
  • Aggrastat
  • Akynzeo
  • Atgam
  • Aveed
  • Bicillin CR
  • Bilillin L-A
  • Blincyto
  • Carnitor
  • Crysvita
  • Cuvitru
  • Cytogam
  • Enjaymo
  • Flebogamma DIF
  • Folotyn
  • Fragmin
  • Gammagard S/D
  • Gammaplex
  • Humira
  • Imlygic
  • Infugem
  • Kyprolis
  • Leukine
  • Lupron Depot-PED
  • Minocin
  • Mononine
  • Nipent
  • Nplate
  • Oncaspar
  • Padcev
  • Panhematin
  • Prolia
  • Rybrevant 
  • Signifor LAR
  • Synribo
  • Tezspire
  • Trogarzo
  • Vabomere
  • Varizig
  • Vectibix
  • Vivitrol 
  • Xiaflex 

Adjustments to Drug Coinsurance

Traditionally, Medicare Part B coinsurance is 20% of the total bill once the Part B deductible has been met. This means you must pay 20% of the costs out-of-pocket. The Medicare prescription drug rebate rule lessens this coinsurance amount for anyone receiving a qualifying drug.

Coinsurance amounts for the first 27 drugs range from as low as 11.892% to 19.990%. Depending on the amount of inflation, the drug price was increased. The chart below reveals each drug and its coinsurance amount for 2023.

Drug Name (Manufacturer) Adjusted Coinsurance Amount (Typically 20%)
Abelcet 19.4%
Adcetris 19.5%
Aggrastat 19.5%
Akynzeo 15.7%
Atgam 18.1%
Aveed 18.8%
Bicillin CR 17.6%
Bilillin L-A 17.2%
Blincyto 19.3%
Carnitor 13.6%
Crysvita 19.8%
Cuvitru 19.9%
Cytogam 19.1%
Enjaymo 19.8%
Flebogamma DIF 14.1%
Folotyn 19.9%
Fragmin 11.9%
Gammagard S/D 19.3%
Humira 19.7%
Imlygic 19.6%
Infugem 19.4%
Kyprolis 19.7%
Leukine 19.4%
Lupron Depot-PED 19.4%
Minocin 19.1%
Mononine 19.9%
Nipent 18.9%
Nplate 19.7%
Oncaspar 19.1%
Padcev 19.7%
panhematin 19.5%
Prolia 19.8%
Rybrevant 19.9%
Signifor LAR 19.91%
Synribo 18.9%
Tezspire 19.9%
Trogarzo 19.8%
Vabomere 19.8%
Varizig 19.6%
Vectibix 19.6%
Vivitrol 19.9%
Xiaflex 19.1%

How to Get Help With Medicare Prescription Drug Rebates 

If you receive any of the drugs listed above in an outpatient setting, you will notice a decrease in your out-of-pocket spending in the coming months. For beneficiaries looking to cut out-of-pocket costs, additional coverage options are available to help cover the cost of Medicare Part B coinsurance.

For individuals who wish to reduce their healthcare spending, Medicare Supplement plans and Medicare Part D plans are a great way to receive comprehensive coverage and overall reduce costs. Complete our online rate form or contact us at the number above to review plan options in your area, check your eligibility, and compare your options today.

Sources:

MedicareFAQ is dedicated to providing you with authentic and trustworthy Medicare information. We have strict sourcing guidelines and work diligently to serve our readers with accurate and up-to-date content.

  1. Biden administration names first round of drugs to face Medicare rebate penalties, The Hill. Accessed March 2023.
    https://thehill.com/policy/healthcare/3901159-biden-administration-names-first-round-of-drugs-to-face-medicare-rebate-penalties/
  2. How Will the Prescription Drug Provisions in the Inflation Reduction Act Affect Medicare Beneficiaries?, KFF. Accessed March 2023.
    https://www.kff.org/medicare/issue-brief/how-will-the-prescription-drug-provisions-in-the-inflation-reduction-act-affect-medicare-beneficiaries/
  3. Reduced Coinsurances, CMS . Accessed June 2023.
    https://www.cms.gov/files/document/reduced-coinsurance-part-b-rebatable-drugs-6823.pdf

Kayla Hopkins

  • Content Editor

Kayla Hopkins is an accomplished writer and Medicare enthusiast serving as the Editor of MedicareFAQ.com. Upon completing her Communications degree from Ohio University, Kayla dedicated her time to understanding the ever-evolving landscape of healthcare. With her extensive background as a Licensed Insurance Agent, she brings a wealth of knowledge and expertise to her writing.

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