New Law Mandates Quarterly Rebates from Drug Makers on Negotiated Prices, Cuts Patient Coinsurance

This bill, the 'Protecting Patient Access to Cancer and Complex Therapies Act,' directly targets the cost of high-price medications covered under Medicare Part B—specifically, those drugs selected for Maximum Fair Price (MFP) negotiation. It scraps the old payment rules for these specific drugs and establishes a new, mandatory system where drug manufacturers must pay quarterly rebates to the government. The big picture is simple: if the government negotiates a lower price, the manufacturer has to pay back the difference between that lower price and what Medicare used to pay, and patients get cheaper bills.

The Cost Cut: What It Means for Your Wallet

The most immediate, real-world impact for Medicare recipients is on their out-of-pocket costs. Currently, coinsurance for Part B drugs is often 20% of the standard payment rate, which can be massive for expensive cancer or complex therapy drugs. Under this new rule, the patient’s 20% coinsurance will now be calculated based on the lower, newly negotiated Maximum Fair Price (MFP6 Coinsurance Amount), not the higher Average Sales Price (ASP6). For someone relying on a drug that costs tens of thousands of dollars, switching that 20% calculation base could mean saving hundreds or even thousands of dollars per infusion or treatment cycle. This is a direct win for patients using these specific high-cost therapies.

The Manufacturer Mandate: Recouping the Savings

To make sure the government actually captures the savings from the negotiated prices, the bill imposes a serious new requirement on drug makers. For every quarter, the manufacturer of a selected drug must pay a rebate to Medicare within 30 days of receiving the payment report. This rebate is calculated by taking the total difference between the old standard payment rate and the new MFP rate, and multiplying that by the number of units sold. Essentially, the manufacturer is forced to hand over the savings generated by the lower negotiated price back to the Federal Supplementary Medical Insurance Trust Fund. The bill explicitly states this rebate is required on top of any other rebates the company already owes under Medicaid or other Medicare programs.

Technical Plumbing: Making the System Work

This isn't just about the patient and the manufacturer; it requires a complete overhaul of how Medicare pays for these drugs. The bill makes several technical adjustments across the system to ensure the lower MFP is used everywhere. For example, it adjusts payment rates for Ambulatory Surgical Centers (ASCs) and hospital outpatient departments so that if they administer one of these selected drugs, they must also use the lower MFP calculation for both the government payment and the patient’s coinsurance. This ensures consistency and prevents a scenario where a patient pays less at a doctor’s office but full price at a hospital outpatient clinic. The law is clear: for these selected drugs, the old payment calculation rules are out, and the MFP rules are in, across the board.