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 draft rulemaking for public comment for the Medicare Prescription Drug Inflation Rebate Program on July 10, 2024. The proposed rule is published in the Federal Register. Comments are due by September 9, 2024 and can be submitted here. Follow the “Submit a comment” instructions.

Fact Sheet: Medicare Prescription Drug Inflation Rebate Program Proposed Rule (PDF) (July 10, 2024)

CY 2025 Physician Fee Schedule and Quality Payment Program Proposed Rule (July 10, 2024)

Guidance for the Inflation Rebate Program

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)

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)