Requires drug manufacturers to pay a rebate if drug prices increase faster than the rate of inflation (CPI-U) for:

  • Single-source drugs and biologicals covered under Medicare Part B
  • All covered drugs under Medicare Part D except those where average annual cost is <$100
  • 2021 is the base year for measuring cumulative price changes relative to inflation
  • The rebate amount is based on units sold in Medicare multiplied by the amount that a drug’s price in a give year exceeds the inflation-adjusted price
  • Price changes are measured based on the average sales price (for Part B drugs) or the average manufacturer price (for Part D); these measures include prices charged in the commercial market
  • Rebates paid by manufacturers would be deposited in the Medicare Supplementary Medical Insurance (SMI) trust fund
  • Manufacturers that do not pay the required rebate would face a penalty of at least 125% of the original rebate amount

Have any questions regarding this notice? Please contact your Total Benefit Solutions health insurance specialists today at (215)355-2121.