Congress Passes Prescription Drug Pricing Reform

Congress Passes Prescription Drug Pricing Reform

August 12, 2022, Covington Alert

[Updated October 7, 2022]

On Friday, August 12, 2022, the U.S. House of Representatives passed the Inflation Reduction Act (“IRA”), which includes provisions for “Prescription Drug Pricing Reform.” Once implemented, these provisions will represent significant changes to how certain drug products are priced and paid for under Medicare, including by authorizing price-capped “negotiation” for certain high-spend drugs and mandating inflation-based rebates for Medicare utilization. The IRA also redesigns the Medicare Part D benefit to restructure manufacturer, federal government, and plan obligations, as well as set forth cost-sharing limits for patients, among other provisions.