The Biden administration will subject dozens of drugmakers to inflation penalties, the White House said on Thursday, in a move that would reduce out-of-pocket costs for Medicare recipients.
President Joe Biden's signature Inflation Reduction Act (IRA) includes a provision to penalize drugmakers for charging prices that rise faster than inflation for people on Medicare, a government program for those age 65 and older and the disabled.
Prices of 48 drugs that fall under Medicare Part B, which covers drugs administered at a health facility, surged faster than inflation in the last quarter of 2023, according to the White House.
These drugs may be subject to inflation rebates in the first quarter of 2024 as a result of the IRA, which Biden, a Democrat, signed last year.
The Centers for Medicare and Medicaid Services and the White House did not immediately respond to requests for more details on the 48 drugs.
In total, prices of 64 drugs had increased faster than inflation over the last four quarters, the White House said in a statement.
Prices of some drugs such as Signifor, used to treat an endocrine disorder, have risen faster than inflation every quarter since the IRA's rebate provision came into effect.
The IRA aims to save $25 billion annually by 2031 by requiring drugmakers to negotiate the prices of selected expensive drugs with the U.S. Centers for Medicare and Medicaid Service, which oversees Medicare.
The Biden administration last week announced it was setting new policy that will allow it to seize patents for medicines developed with government funding if it believes their prices are too high.