HHS Releases New Reports on Positive Impact of Inflation Reduction Act on Prescription Drug Prices

The U.S. Department of Health and Human Services (HHS) released two new reports that illustrate the urgency of addressing skyrocketing prescription drug costs in the U.S. HHS’s analyses of prescription drug prices from 2016 to 2022 show that if the Inflation Reduction Act had been in place from July 2021 to July 2022, more than 1,200 prescription drugs potentially would have been subject to the new provision requiring drug manufacturers to pay rebates to Medicare if they enact price increases greater than inflation for drugs. Price increases on those drugs in the month the price change took effect averaged more than 30 percent.

Publication of these reports coincides with a key date related to a provision of the Inflation Reduction Act, which requires drug manufacturers to pay rebates for drugs in Medicare Part D whose price increases exceed inflation for the 12-month period beginning Oct. 1, 2022. A similar provision for Part B drugs takes effect in January 2023. In addition, the Inflation Reduction Act requires the federal government to negotiate drug prices on certain high spending prescription drugs for Medicare beneficiaries.

“In recent years, prescription drug prices have skyrocketed, but thanks to the Inflation Reduction Act, America’s families will soon start seeing relief,” said HHS Secretary Xavier Becerra. “The Biden-Harris Administration is focused on providing high-quality, affordable healthcare to people across the country. No one should have to choose between buying groceries or a prescription, making a home repair or going to the doctor, or splurging on a grandkid or seeking treatment.”