Inflation Rebates in Medicare

The prescription drug law, known as the Inflation Reduction Act, requires drug companies that raise the prices of certain drugs covered under Part B and Part D faster than the rate of inflation to pay Medicare a rebate.

Rulemaking for the Inflation Rebate Program

CMS issued final rulemaking for the Medicare Prescription Drug Inflation Rebate Program on November 1, 2024. The final rule is published in the Federal Register. Prior to issuing the final rule, CMS issued the proposed rule on July 10, 2024 for public comment and the 60-day comment period closed on September 9, 2024.

Fact Sheet: Medicare Prescription Drug Inflation Rebate Program Final Rule (PDF)

CY 2025 Physician Fee Schedule and Quality Payment Program Final Rule

Guidance for the Inflation Rebate Program

Fact Sheets

Fact Sheet: Medicare Prescription Drug Inflation Rebate Program Revised Guidance (PDF) (December 14, 2023)

Fact Sheet: Medicare Prescription Drug Inflation Rebate Program Initial Guidance (PDF) (February 9, 2023)

Medicare Part B Guidance

Medicare Part B Inflation Rebate Program Revised Guidance (PDF) (December 14, 2023)

Revised Part B Inflation Rebate Guidance: 340B Modifier (PDF) (December 14, 2023)

Medicare Part B Inflation Rebate Program Initial Guidance (PDF) (February 9, 2023)

Part B Inflation Rebate Guidance: 340B Modifier (PDF) (December 20, 2022)

Medicare Part D Guidance

Medicare Part D Inflation Rebate Program Revised Guidance (PDF) (December 14, 2023)

Medicare Part D Inflation Rebate Program Initial Guidance (PDF) (February 9, 2023)

Public Comments on Initial Rebate Guidance

Public Comments: Medicare Inflation Rebate Program Initial Guidance (ZIP) (submitted by March 11, 2023)

Access to the Inflation Rebate Portal

CMS shared detailed instructions with Drug Manufacturers on how to gain access to Inflation Rebates information in the Manufacturer Payment Portal (MPP) in our November 21, 2024 communication, “Action Needed: Medicare Prescription Drug Inflation Rebate Program Onboarding (PDF).” In this communication, CMS requested manufacturers take these actions by January 15th to allow time for MPP onboarding. CMS additionally followed up with subsequent communications on December 16, 2024 (PDF) and March 10, 2025.

If your organization has not completed the steps in the November 21, 2024 memo, inclusive of assigning Inflation Rebate Program Points of Contact within CMS HPMS, please do so as soon as possible. Your timely designation of Inflation Rebate Program Points of Contact will enable your organization’s timely onboarding to the MPP where manufacturers will view information and potentially make payments necessary for compliance with Inflation Rebate Program requirements.

Rebate Reduction Requests

Frequently Asked Questions: Rebate Reductions under the Medicare Prescription Drug Inflation Rebate Program (PDF) (July 22, 2024)

Instructions to Submit a Rebate Reduction Request: To request a rebate reduction when a drug company believes there is a severe supply chain disruption of a Part B or Part D rebatable biosimilar or generic Part D rebatable drug or a likely shortage of a generic Part D rebatable drug, the drug company should first email IRARebateandNegotiation@cms.hhs.gov to indicate its intention to submit a request for a reduction in the rebate amount and specify whether the request is for a severe supply chain disruption or likely shortage. CMS will then provide the drug company with the relevant request form(s) and access to a Box folder, or alternative submission process approved by CMS, specific to the drug company’s request to allow for secure submission of the materials relating to the rebate reduction request.
Information Collection Request (ICR): The Rebate Reduction Requests under Sections 11101 and 11102 of the Inflation Reduction Act ICR is available for viewing on OMB’s website. Click “all” to see full details.

Coinsurance Adjustment for Part B Rebatable Drugs

Beginning April 1, 2023, people with Medicare started to see lower out-of-pocket costs for certain Part B drugs and biologicals with prices that have increased faster than the rate of inflation. For these drugs and biologicals, the beneficiary coinsurance is 20 percent of the inflation-adjusted payment amount, which is less than what the beneficiary would pay in coinsurance otherwise.

Fact Sheet: Part B Rebatable Drug Coinsurance Reduction (PDF) (March 2, 2023)