Estimated Changes to Employer-Sponsored Health Insurance Premiums Due to the Drug Inflation Rebate Provision of the Build Back Better Act

Build Back Better Act’s drug inflation rebate would lower premiums by $111 billion over the next decade.

The Issue

The average price of prescription drugs in the United States continues to climb. Several provisions related to prescription drug pricing included in the Build Back Better Act would lower drug costs for those with Medicare and private insurance, decreasing federal government and private payer drug spending.

Key Findings

• The Build Back Better Act’s drug inflation rebate provision would reduce premiums by $3 billion in 2023 and $21 billion in 2031.
• Premiums would fall by 0.4 percent in 2023 and 1.7 percent in 2031.
• Premiums would be a total of $111 billion lower between 2022 and 2031, and the average annual reduction in premiums between 2022 and 2031 would be 1.1 percent.

Conclusion

Limiting annual increases in drug prices through inflation rebates improves access to regular care and affordability, while generating billions of dollars in savings for the federal government and private insurers.

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