Presentation (CTI)

OBJECTIVES: In August 2022, the Inflation Reduction Act (IRA) was signed into law with provisions to improve Medicare through cost containment measures. These measures include mandatory negotiations for top selling Medicare drugs, Medicare beneficiary annual out of pocket cap over $2,000, and manufacturer penalty rebates if therapy prices are increased at a steeper rate than inflation.
On August 15, 2024, CMS released the results of the first round of negotiated prices for the IRA involving 10 Medicare Part D branded drugs which raised questions around future negotiations and how they may impact drug pricing strategies moving forward.
METHODS: This study presents the results of primary research from N=8 US payer stakeholders that provide current perceptions of the IRA and its potential impact on the pharmaceutical landscape. By exploring stakeholder concerns and expectations, this research identifies emerging trends and raises key questions around the evolving pharmaceutical landscape resulting from the CMS negotiations.
RESULTS: The first batch of CMS negotiations have yielded modest drug price cuts, primarily due to existing substantial rebates on the selected products. While expected, these outcomes highlight uncertainties surrounding future negotiation rounds. Payers emphasize the economic burden of IRA changes as a key concern (e.g., plan contribution for OOPs above the $2K cap). Uncertainties cited include which therapeutic areas will be impacted, whether manufacturers are expected to adapt life cycle management strategies (e.g., reformulating products to delay negotiations), and how payer dynamics may shift in response to these changes.
CONCLUSIONS: The broader impact of the IRA on Medicare and CMS negotiations is becoming clearer, though there remains ambiguity around how the pharmaceutical industry will respond. The impact of the IRA on the commercial sector remains uncertain, with stakeholders debating whether Medicare-focused policies will drive broader systemic changes or further exacerbate pricing challenges seen in healthcare.