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Simulated Medicare Part B Savings From Inflationary Rebates

Rebates to the federal government for greater-than-inflation increases in the prices of Medicare Part B drugs would have totaled $3.7 billion had provisions of the Inflation Reduction Act (IRA) of 2022 been in effect in 2018 through 2020, according to an analysis of the 100 drugs with the highest spending under the program. The figure is 3% of the total Part B drug spending.

“Savings were greatest among drugs for rare diseases ($3.1 billion), biologics ($3.0 billion), and cancer drugs ($1.5 billion),” the authors found based on public annual Medicare Part B spending data. “Rebates offset a higher percentage of spending among drugs that treat endocrine disorders ($760 million/$7.3 billion = 10%), rare diseases ($3.1 billion/$63.5 billion = 5%), and small-molecule drugs ($733 million/$13.4 billion = 5%). The drugs with the highest rebates from 2018 to 2020 were denosumab ($481 million), rituximab ($374 million), and abatacept ($352 million).”

Source: JAMA