Medicare will test a new way to calculate drug price increases
What happened
The US health department wants to change how it calculates drug price increases for Medicare. This could lower costs for the government by changing how drug companies pay rebates.
Why it matters
Drug companies currently pay rebates to Medicare if their prices rise faster than inflation. This proposed change means the government would calculate those rebates differently. If successful, this could reduce what Medicare pays for certain drugs, shifting some of the cost burden back to drug manufacturers.
The signal
Watch for the final rule and then whether the Centers for Medicare & Medicaid Services reports actual cost savings for Part D drugs in the first year of the model.