Medicare Imposes Savings on 64 Drugs Exceeding Inflation Rate

The US government is going after drugmakers such as Bristol Myers Squibb Co., Johnson & Johnson, and Merck & Co.to pay rebates to Medicare if they raise the price of some of their drugs faster than inflation beginning in January.

Some Medicare enrollees will pay a lower coinsurance rate for 64 drugs treating cancer, osteoporosis, and substance use disorder between Jan. 1 and March 31, 2025, the US Department of Health and Human Services said Friday.

The announcement is the latest effort in the government’s Medicare Prescription Drug Inflation Rebate Program, which requires drug companies to pay rebates to the Centers for Medicare & Medicaid Services when prices for certain drugs increase faster than the rate of inflation.

Some of the drugs on the list included Merck’s Zerbaxa, Johnson & Johnson’s Talvey, Bristol Myers’ Abecma, Astella Pharma Inc.'s Cresemba, and Amgen Inc.'s Evenity.

The drugs are typically administered in doctor’s offices and hospitals.

“By discouraging drug companies from raising their prices faster than inflation, we are keeping prices affordable for the people with Medicare who rely on these drugs to live healthier lives,” HHS Secretary Xavier Becerra said in a statement Friday.

“The law has also capped out-of-pocket costs and finally allows Medicare the right to negotiate lower prices. It is a success story for the American people.”

The HHS said over 853,000 people with Medicare use these drugs annually. Beneficiaries who take these medicines in the first quarter of 2025 may save between $1 and $10,818 per day, according to the agency.

The government intends to invoice drug manufacturers for 2023 and 2024 Part B inflation rebates no later than fall 2025.