Pricing new drugs for the U.S. market, especially those treating rare diseases, is getting a lot more complex now that the Medicare inflation rebate is in play. The rebate provision in the newly enacted Inflation Reduction Act incentivizes companies to set higher launch prices for drugs that will be used by Medicare beneficiaries since their future price increases will be limited to the rate of inflation. Although some of the other drug pricing measures included in the new law won’t kick in for a few years, the Medicare inflation rebate is to become effective next year.