Medicare identifies drug makers who will pay penalties for raising prices of 27 drugs faster than the rate of inflation

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US Department of Health and Human Services (HHS) List of 27 medicines released whose Medicare Part B prices have risen faster than rate inflation in violation of the Inflation Reduction Act.

Penalties to companies, in the form of rebates paid to Medicare, are deposited into the Medicare Trust Fund, which helps pay for health services, According to a statement from the government, companies will be given bills for 2023 and 2024 no later than 2025.

Pfizer (PFE) lists five drugs along with CGen (SGen) PadSave – which will soon be a part of Pfizer’s portfolio. AbbVie’s (ABBV) blockbuster Humira — which this month faces for the first time with a biosimilar, Roche’s (RHHBY) Miracera and Gilead’s (GILD) Yescarta — also made the list.

The impact on each company appears to be mixed.

Most of Pfizer’s five drugs are not major sources of revenue. Just one, for example, is responsible for $269 million in 2022 global sales revenue. AbbVie, by comparison, reported sales of $21 billion in 2022 for Humira.

The companies did not immediately return requests for comment. Shares of AbbVie and Roche were trading lower in Wednesday’s session, but most big companies didn’t seem affected by the news.

HALLANDALE BEACH, UNITED STATES – NOVEMBER 1: US President Joe Biden holds a pamphlet as he remarks on protecting Social Security and Medicare and lowering prescription prices on November 1, 2022 in Hallandale Beach, Florida, United States Are. (Photo by Kyle Mazaz/Anadolu Agency via Getty Images)

The drugs will also cost less for patients with Medicare or Medicare Advantage, with lower co-insurance, from April 1 through June 30, which could save them as little as $2 or $390 per average dose, HHS said in a statement. .

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The move is part of the Biden administration’s Inflation Reduction Act (IRA), which focuses on driving down the cost of generic drugs and punishing drugmakers for artificially raising prices. The department is also expected to hold a press briefing to discuss a list of drugs for which Medicare will negotiate prices thanks to the power granted to them by the IRA.

“The Biden-Harris administration believes that people with Medicare should not be on the hook when companies inexplicably raise the prices of their drugs,” HHS Secretary Javier Becerra said in the statement Wednesday.

“President Biden has made lowering prices for Americans a top priority, and we are using every lever to deliver results,” he said.

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