Inflation Reduction Act and Medicare: What you Need to Know

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Key dates for the first year of the Inflation Reduction Act’s Medicare drug price negotiation have been announced by the U.S Department of Health and Human Services, which will help ensure that Medicare beneficiaries have access to high-quality medications at affordable prices.

For the first time in history the Inflation Reduction Act’s Medicare portion will allow Medicare to negotiate with drug manufacturers for the price of prescription drugs.

CMS has released more details on this matter and has urged the importance of public feedback on this measure. CMS will work with patients and consumers, part D plan sponsors and Medicare Advantage organizations, drug manufacturers, hospitals and healthcare providers and others. 

In addition, members of the public are welcome to share feedback and input in writing by Email at:

CMS requests comments on the below key elements of the program guidance for the negotiation program:

a) Terms and conditions contained in the manufacturer agreement, including the manufacturer’s and Secretary’s responsibilities. 

b) Approach for considering (1) the manufacturer-reported data elements and (2) evidence about alternative treatments. 

c) Process for the offer and counteroffer exchange between the Secretary and manufacturers. 

d) Content of an explanation for the maximum fair price. 

e) Method for applying the maximum fair price across different dosage forms and strengths of a selected drug. 

f) Dispute resolution process for specific issues that are not exempt from administrative and judicial review under section 1198. 

g) Processes for compliance monitoring and imposition of civil monetary penalties for violations.

The process begins in 2023 with the first negotiated prices to go into effect in 2026. 

For more details on the full timeline of the Drug Price Negotiation Program process, visit :

Through the Inflation Reduction Act’s Medicare provisions the Biden-Harris Administration has sought to lower health care costs for seniors as a top priority. The act included other provisions as well that are already in effect:

  • Free Vaccines: Recommended preventative vaccines are free of charge for people with Medicare prescription drug coverage as of January 1, 2023
  • Insulin CAP: Cost-sharing for a month’s supply of each covered insulin is capped at $35 and there is no deductible for people with Medicare prescription drug coverage as of January 1, 2023
  • Rebates Required From Drug Manufacturers’ Increasing Prices Faster Than Inflation: As part of a cost-saving measure for Medicare, drug manufacturers will be required to pay rebates if they increase their prices for certain drugs at a rate that exceeds the rate of inflation. The first rebate period began October 1, 2022 in Part D and January 1, 2023 in Part B.
  • ACA Subsidies: This past open enrollment period, more people qualified for help purchasing affordable high-quality health coverage.
  • Biosimilars: This provision is an attempt to increase access to biosimilars, as well as to encourage competition between biosimilars and their reference biological products. Over time, this competition may lower drug costs and lead to savings for beneficiaries and Medicare.

While these many of the above provisions are in effect in regards to the negotiation of drug prices for Medicare customer, the following are key dates related to this program: 

The following are key dates related to this program:

  • By September 1, 2023, CMS will publish the first 10 Medicare Part D drugs selected for the Medicare Drug Price Negotiation Program.
  • The negotiated maximum fair prices for these drugs will be announced by September 1, 2024 and prices will be in effect starting January 1, 2026.
  • In future years, CMS will select for negotiation 15 more Part D drugs for 2027, 15 more Part B or Part D drugs for 2028, and 20 more Part B or Part D drugs for each year after that, as outlined in the Inflation Reduction Act.

The new bill gradually reduces the cost of prescription drugs to a level that is more in line with other countries — a great step forward for seniors and their families who are struggling financially. 

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