Manufacturer Discount Program

The Inflation Reduction Act of 2022, Public L. 117-169 (IRA), established the Medicare Part D Manufacturer Discount Program that begins on January 1, 2025. Under the Manufacturer Discount Program, participating manufacturers are required to provide discounts on their applicable drugs both in the initial and catastrophic coverage phases of the Part D benefit. There is no manufacturer discount provided during the deductible phase.

For applicable drugs in the Initial Coverage Phase, the manufacturer pays a discount through the Manufacturer Discount Program, which is typically 10 percent. For applicable drugs in the Catastrophic phase, the manufacturer pays a discount, which is typically 20 percent.