HHS: Prices of 1,200 drugs rose faster than inflation

Drugmakers raised the list prices of more than 1,200 treatments above the 8.5 percent rate of inflation from July 2021 to July 2022, according to a new report from the Department of Health and Human Services.

Why it matters: The report, shared with Axios, highlights the potential impact of the drug pricing provisions in the Inflation Reduction Act that President Biden signed into law in August, which requires drug companies to pay rebates to Medicare if prices rise beyond the rate of inflation.

• While the methodologies between the law and the report aren't exactly the same, it gives a ballpark of the number of drugs that could be subject to the new requirement.

Between the lines: The new requirement begins to take effect on Saturday, with price increases being measured in the 12-month period beginning Oct. 1.

• For comparison: The 1,200 drugs with price increases above inflation make up about one percent of all drug products in the study.
• The report looks at list prices, which do not account for rebates paid to negotiators known as pharmacy benefit managers.

What they're saying: "If the Inflation Reduction Act had been in place from July 2021 to July 2022, more than 1,200 prescription drugs potentially would have been subject to the new provision requiring drug manufacturers to pay rebates to Medicare if they enact price increases greater than inflation for drugs," HHS said in a statement.

• The average price increase for those 1,216 drugs was 31.6 percent, the report said.

The big picture: The limits on drug price increases are one of the first provisions of the drug pricing law to take effect. New negotiated prices under Medicare for some drugs take effect in 2026, for example.

• Democrats see the drug price law as a clear political winner. President Biden touted the law earlier this week.

The other side: Drug industry groups say pricing policies like those in the IRA will threaten patient access and future innovations.