Medicare announces plan to recoup billions from drug companies

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The new details released Thursday outline how Medicare will use its new authority to claw back refunds from drugmakers for price increases that outpace the rate of inflation.

Finally, industry advisor Curran said, this new guidance also offers a first highly anticipated look at the federal government's broader philosophical approach to wielding its pair of new powers."Everyone is going to be reading the tea leaves – are they being strict or less strict – and trying to draw conclusions from that."to reduce or waive rebates for companies whose drugs experience shortages or a supply chain disruption.

Medicare now turns its attention to finalizing and publishing similar guidance on price negotiation. It's an authority the industry is still surprised lawmakers managed to pass."​​We're having to wrestle with responding to guidance about something we never thought was going to happen," saidBryant said the forthcoming guidance, which targets some of the industry's top sellers, has the group's full attention.

Many experts believe that manufacturers will comb through those details looking not only for loopholes, but also for ammunition."Manufacturers are absolutely going to be looking to mount a legal challenge," said former Senate advisor Kaltenboeck. PhRMA said it expects pressure for legislative change to grow too.

Those legal stakes are one more reason people like former HHS official Richard Frank worry about the agency moving so fast through such technical work. The Affordable Care Act , the last health care law this consequential, was also written and implemented in a hurry. A few words"I do think the lessons learned from the ACA are fresh on people's minds," Richard Frank said.

Seshamani, who helped implement the ACA, said that's why the agency has"set up monthly technical calls with drug manufacturers [and] regular strategic policy meetings with patients groups, providers [and insurance] plans."Copyright 2023 NPR. To see more, visit https://www.npr.org.

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