Inflation Reduction Act 2022: Medicare drug price negotiation

United States, federal statute. The Inflation Reduction Act was signed on 16 August 2022 (Public Law 117-169). Its prescription drug title created the Medicare Drug Price Negotiation Program (Social Security Act sections 1191 to 1198), inflation rebates, and a redesign of Part D. Primary text: the Congress.gov record of H.R.5376; the Centers for Medicare and Medicaid Services publish the programme pages and negotiated prices.

What it changed: Medicare selects high-spending drugs that have been on the market without generic or biosimilar competition for at least seven years (small molecules) or eleven years (biologics) and negotiates a 'maximum fair price' that takes effect two years later. The first ten drugs, including the BTK inhibitor ibrutinib, had negotiated prices from 1 January 2026; the second list of fifteen, with prices from 2027, included the cancer drugs palbociclib, enzalutamide, pomalidomide and acalabrutinib. Part D out-of-pocket spending was capped at 2,000 dollars a year from 2025, which for patients on oral cancer drugs replaced bills of ten thousand dollars or more. Drugs with a single orphan designation and no other approved use were excluded; the One Big Beautiful Bill Act of July 2025 (Public Law 119-21) broadened that exclusion to drugs with multiple orphan-only indications and restarted the clock at the first non-orphan approval.

The arguments: manufacturers sued (unsuccessfully so far) and warned of fewer small-molecule cancer drugs, the 'pill penalty' of nine versus thirteen years; supporters point to the caps and the first negotiated savings. Oncology is disproportionately affected because cancer drugs dominate the highest-spending lists, and the orphan exclusion shapes which indications companies pursue first.