On February 9, 2023, the Centers for Medicare and Medicaid Services (CMS) issued initial program guidance related to the implementation of the Prescription Drug Inflation Rebate Program. The rebate program was authorized under Sections 11101 (as to Medicare Part B) and 11102 (as to Medicare Part D) of the Inflation Reduction Act (IRA). The guidance lays out key information on CMS’s new industry-changing authority over prescription drug pricing. Of particular interest to stakeholders are the forthcoming changes to claim-level identification of drugs obtained through the 340B Drug Pricing Program and changes that could prompt a new federal False Claims Act enforcement risk related to manufacturer price reporting.
Under the IRA, drug manufacturers are required to pay a rebate to Medicare if they raise the price for certain drugs faster than the rate of inflation. For part B drugs, price changes will be measured based on the average sales price. For part D drugs, price changes will be measured based on the average manufacturer price. The base year for measuring cumulative price changes relative to inflation is 2021. If prices increase higher than the rate of inflation, manufacturers will be required to pay the difference in the form of a rebate to Medicare. The rebate amounts will be calculated and invoiced by CMS, with such calculation equal to the total number of units sold in Medicare multiplied by the amount, if any, by which a drug’s price in a given year...
stage at the Ninth Circuit, where pharmaceutical companies say a momentous new ruling "illustrates perfectly" the constitutional concerns of U. S. Supreme Court justices regarding FCA enforcement. ...