Pills leaning against coins 

The recently enacted Inflation Reduction Act (IRA) includes several provisions aimed at lowering prescription drug prices for those on Medicare and reducing drug spending by the federal government. But these cost reductions for Medicare may lead to employers and their employees paying the price.

With these reforms, the Centers for Medicare and Medicaid (CMS) will finally have the ability to — and will, in fact, be required to — negotiate the price of drugs with pharmaceutical companies, which should lower the cost for both CMS and Medicare beneficiaries. The consequence of not “negotiating” or accepting the CMS price would be the equivalent of a 95% tax on the Manufacturer’s Medicare revenue.  At the same time, drug makers will be forced to pay rebates to Medicare if drug prices outpace inflation. The new law also caps the cost of insulin at $35 per month for Medicare beneficiaries and total out-of-pocket spending on drugs at $2,000 annually.

Complete your profile to continue reading and get FREE access to BenefitsPRO.com, part of your ALM digital membership.

Your access to unlimited BenefitsPRO.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical BenefitsPRO.com information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com

Already have an account?



Join BenefitsPRO

Don’t miss crucial news and insights you need to navigate the shifting employee benefits industry. Join BenefitsPRO.com now!

  • Unlimited access to BenefitsPRO.com - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
  • Exclusive discounts on BenefitsPRO.com and ALM events.

Already have an account? Sign In Now
Join BenefitsPRO

Copyright © 2022 ALM Global, LLC. All Rights Reserved.