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

That’s right. The Biden administration plans to take action to lower the cost of some prescription drugs by imposing penalties on drug manufacturers who have increased their prices more than the rate of inflation. This measure, included in the Build Back Better Act, could affect around 64 drugs that account for half of spending by Medicare, a federal health insurance program that mainly benefits people aged 65 or older.

The effort is part of a larger plan by President Joe Biden’s administration to tackle the high costs of healthcare and prescription drugs in the U.S. This rule in particular aims to make sure that drug prices rise no faster than inflation.

The law would impose a monetary penalty on drug companies if they raise the cost of their medications more than the rate of inflation without justification. The penalty would be equal to the entire amount of the price increase above inflation.

Potential savings for patients and the federal government could be substantial as it could limit future price increases and possibly lead to price reductions for some drugs. However, it’s still under debate in Congress as some lawmakers believe it could discourage drugmakers from innovation and developing new treatments.

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