The Biden administration announced Thursday that the prices for dozens of drugs in the Medicare program rose faster than the rate of inflation.
That’s in violation of a new federal law, the Inflation Reduction Act, passed last year. U.S. Department of Health and Human Services Secretary Xavier Becerra said at a press conference in Phoenix those manufacturers will be penalized.
“Forty-eight drugs were identified by our team at HHS as having been increased by more than the rate of inflation. So, guess what? Those manufacturers have to rebate back to the Medicare program the money they charge beyond the rate of inflation,” Becerra said.
Rebates paid back to the federal government will in turn be used to lower the prices Medicare enrollees pay for the drugs early next year.
In Arizona , Attorney General Kris Mayes has filed a lawsuit against several pharmacy benefit managers and manufacturers for a similar reason. Mayes says the managers have increased the price of insulin many times more than what it costs to produce, a violation of the Arizona Consumer Fraud Act.
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Attorneys general in some other states are engaged in similar lawsuits.
Mayes said she’s going to get back the money the pharmacy benefit managers and manufacturers made off of Arizonans by "scheming to artificially inflate the price of insulin and other drugs."
She called the practice unconscionable and unacceptable.
Mayes said that she’ll get the profits the companies made back to Arizona consumers, and force them to operate transparently. But it’s not as clear how that money can get back to Arizonans.
“These unfair price increases and these schemes are going to impact individual patients but they are also increasingly going to drive out of business our independent pharmacies," Mayes said.
On the federal level, Becerra said President Joe Biden is working to lower the prices of more drugs every year, and to expand lowered costs to citizens who aren’t on Medicare.
