Heinrich Announces Start Of Cost Containment Measures In Inflation Reduction Act For Prescription Drugs Covered By Medicare

WASHINGTON – U.S. Senator Martin Heinrich (D-N.M.) today announced the start of several of the Inflation Reduction Act’s prescription drug provisions, in particular the policy that will force drug companies to pay a rebate back to Medicare if the price of a product rises faster than the rate of inflation.

"The Inflation Reduction Act that Democrats in Congress passed into law is making a tangible difference in protecting affordable health care coverage and driving down the costs of prescription drugs," said Heinrich. “I’m pleased these provisions are taking effect to lower costs for New Mexicans and stop drug company price hikes.”

October 1st marked the beginning of the one-year period that the Centers for Medicare & Medicaid Services (CMS) will use to determine the annual manufacturer price for every unit of a drug sold in Medicare Part D. After a year, that annual price will be compared to a benchmark price from a prior year. If the annual manufacturer price is higher than the benchmark price, a manufacturer will owe a rebate of the difference back to Medicare. A similar rebate will go into effect for Medicare Part B at the beginning of 2023.

Senator Heinrich supported game-changing measures in the Inflation Reduction Act to drive down health care and prescription drug costs for New Mexico seniors, people with disabilities, and families. The law lowers premiums, gives Medicare the power to negotiate, caps drug costs for seniors, and reduces disparities in health care.

A fact sheet prepared by the U.S. Senate Special Committee on Aging and the Committee on Finance on how New Mexicans will benefit is available here.