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The Inflation Reduction Act is decreasing the out-of-pocket costs for multiple oncology drugs.
Patients with cancer who are insured by Medicare may see lower drug prices over the next few months.
Drug companies must now pay rebates to Medicare when the cost of certain prescriptions increase faster than the rate of inflation. Additionally, there is now lower cost sharing for patients enrolled on Medicare Part B thanks to a provision of the Inflation Reduction Act, which went into effect at the start of the year.
The new pricing standard went into effect on April 1. Now, the beneficiary co-insurance — meaning the out-of-pocket expense for patients on Medicare — will be 20% of the inflation-adjusted payment amount, helping to save money for enrolled patients, according to a press release from the American Society of Clinical Oncology.
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In August 2022, shortly before the Inflation Reduction Act was passed, President Joe Biden tweeted, “The Inflation Reduction Act will cap the amount of money seniors pay on prescription drugs at $2,000 a year for cancer and any other diseases. That’s a godsend for so many families.”
Of note, the $2,000 yearly cap on out-of-pocket expenses is expected to take effect in 2025.
The Centers for Medicare & Medicaid Services (CMS) defined rebatable drugs as “a single source drug or biological product, including certain biosimilar biological products, which are generally injectable and infused drugs or biologicals administered by a physician in a doctor’s office or hospital outpatient setting.”
However, not everyone is applauding the act. Republican representative Dr. Brad Wenstrup, member of the Ways and Means committee and co-chair of the GOP Doctors Caucus, stated that the Inflation Reduction Act would drastically decrease the amount of money that pharmaceutical companies can use for the research and development of life-saving drugs.
“The Inflation Reduction Act will wipeout nearly a third of the current annual spending on cancer research and development, leading to fewer new cures and discouraging innovation and investment in an industry that relies heavily on private sector funding,” Wenstrup wrote in an op-ed for United States domestic policy analysis site RealClearPolicy co-authored by representatives Dr. Andy Harris and Dr. Michael Burgess.
The drugs that are included in the new pricing structure may change quarterly, and now the coinsurance adjustments will be visible on the Medicare Part B Quarterly Sales Pricing, a public document found on the CMS website that outlines drug pricing.
Cancer drugs and those used in the oncology setting that are included in the rebate program that patients on Medicare can expect lower payments for include:
“People with Traditional Medicare and Medicare Advantage who use these drugs may, depending on other health coverage they may have, pay a reduced amount for their coinsurance during this specific quarter,” the CMS said in a statement. “For the quarter (of) April 1 to June 30, 2023, people with Medicare may experience coinsurance amounts that are lower than what they would have paid before the new law passed by as much as $1 - $372 per average dose.”
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