HHS lays out timeline for Medicare drug inflation rebates

Traditional Medicare and Medicare Advantage beneficiaries could begin seeing lower copays for certain Part B drugs beginning April 1, according to new guidance from HHS. 

In a news release published Feb. 9, the agency described the timeline for the implementation of the prescription drug inflation rebate program. 

While the periods for which drug companies will have to pay rebates for raising prices have already begun, CMS will not send invoices for these payments until 2025. 

Part of the Inflation Reduction Act, the rebate program requires drug manufacturers to pay Medicare rebates for increases in drug costs higher than the rate of inflation. 

Here are the key dates HHS laid out: 

  • Oct. 1, 2022: The beginning of the first 12-month period for which drug companies must pay rebates on certain Part D drugs.

  • Jan. 1 2023: The beginning of the first quarter for which drug companies will have to pay rebates for certain Part B drugs. 

  • April 1, 2023: Traditional Medicare and Medicare Advantage beneficiaries may pay lower coinsurance for some Part B drugs with cost increases higher than the rate of inflation. 

  • 2025: CMS will send invoices to drug companies for rebates.

The agency is seeking public feedback on several aspects of the rollout, including reducing rebate amounts for drugs in cases of shortages and supply chain disruptions, and the process to impose penalties on manufacturers that fail to pay rebates. 

Public comment is open until March 11. 

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