Presentation (CTI)

OBJECTIVES: This analysis examines the impact of the Inflation Reduction Act’s (IRA) inflation rebate provision on US Medicare drug pricing, focusing on Medicare Part B drugs. It assesses the disparity between historical drug price growth and inflation rates and identifies treatments potentially most affected by the IRA.
METHODS: Historical pricing trends of single-source, brand-name drugs launched between June 2012 and April 2023 were analyzed. Drug pricing data, including Average Sales Price (ASP), was extracted from CMS resources, and quarterly Consumer Price Index for All Urban Consumers (CPI-U) data was obtained from the Bureau of Labor Statistics. The study assessed price changes relative to inflation over six full calendar quarters after market entry as the starting point for rebate eligibility.
RESULTS: From July 2015 to April 2021, most analyzed drugs exhibited price increases exceeding inflation during a period of low inflation (under 3%). This trend reversed starting July 2021 as inflation surged, suggesting industry moderation to avoid matching price hikes with high inflation. Despite this shift, some drugs, mainly launched between 2012 and 2014, consistently showed price growth above inflation, even after the IRA’s Medicare Part B rebate provision took effect in January 2023. These drugs often lacked expansions into new indications or expanded only within the same tumor type, indicating potential influence of launch pricing strategies and revenue goals on their sustained price growth.
CONCLUSIONS: The IRA’s rebate provision marks a significant shift in US drug pricing dynamics, influencing manufacturer strategies and stakeholder perspectives. While broader trends suggest efforts to moderate price increases amid inflation, certain drugs launched before 2015 maintain pricing patterns exceeding inflation. This analysis highlights the complexity of the IRA’s impact, emphasizing the need for continued monitoring of pricing trends and alternative benchmarks reflecting pharmaceutical production costs and healthcare inflation.