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CMS Publishes Initial Guidance for Medicare Drug Inflation Rebates

The Centers for Medicare & Medicaid Services (CMS) on Feb. 9 released initial guidance to drug manufacturers detailing requirements and procedures for the new Medicare Part B and Part D Prescription Drug Inflation Rebate Program.

As required by the Inflation Reduction Act, drug manufacturers that increase prices faster than the inflation rate will be required to pay rebates to Medicare. In the guidance, CMS seeks public comment on key topics, including, but not limited to:

  • The process to determine the number of drug units subject to rebates.
  • The process CMS intends to use to identify and remove 340B Drug Pricing Program units for calculating rebates.
  • Reduced rebate amounts for certain Part B and Part D drugs in shortage and in cases of severe supply chain disruptions.
  • The process to impose civil monetary penalties on manufacturers that fail to pay rebates for Part D drugs.
  • Assuring accuracy of inflation rebate payments.

Comments are due March 11. CMS plans to use feedback received during the comment period to issue revised guidance later this year.

Contact Senior Director of Policy Erin O’Malley at eomalley@essentialhospitals.org or 202.585.0127 with questions.

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About the Author

Faridat Animashaun is a policy associate at America's Essential Hospitals.

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