Drug Companies Raising Prices Greater Than Inflation? US Government Mulling Imposing Fines - AbbVie (NYSE:ABBV)

Under Joe Biden's signature Inflation Reduction Act, drugmakers for twenty-seven drugs will be penalized for charging prices that rise faster than inflation for people with disabilities or the elderly on the government's Medicare health program.
Price increases for over 50% of Medicare-covered drugs outpaced inflation from 2019 to 2020, averaging 1% that year. A third of those had price jumps of over 7.5%.
"Starting on April 1, Medicare beneficiaries will pay lower coinsurance for Part B drugs that raise prices faster than inflation," White House Domestic Policy Adviser Susan Rice told reporters.
People on Medicare will pay less out-of-pocket by $2 to as high as $390 per average dose starting April 1
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The list includes AbbVie Inc's ABBV arthritis drug Humira, Gilead Sciences Inc's GILD Car-T cancer therapy Yescarta and Seagen Inc's SGEN cancer therapy Padcev, Reuters reported citing White House's fact sheet.
Companies raising prices higher than the inflation rate will be required to pay Medicare the difference in the form of a rebate, and failing to do so will face a penalty equaling 125% of the rebate amount.
The government will start invoicing the companies for the rebates in 2025, but Medicare will start reducing out-pocket-costs for members in April.
The government will update the list of drugs each quarter.
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