Biden administration to lower costs for 64 drugs through inflation penalties on drugmakers

The Biden administration on Wednesday said it will impose inflation penalties on 64 prescription drugs for the third quarter of this year, lowering costs for certain older Americans enrolled in Medicare. 

President Joe Biden has made lowering U.S. drug prices a key pillar of his health-care agenda and reelection platform for 2024. A provision of Biden’s Inflation Reduction Act requires drugmakers to pay rebates to Medicare, the federal health program for Americans over age 65, if they hike the price of a medication faster than the rate of inflation. 

It is separate from another provision under the law that allows Medicare to negotiate lower prescription drug prices with manufacturers. On average, Americans pay two to three times more than patients in other developed nations for prescription drugs, according to the Biden administration.