Presentation (CTI)

OBJECTIVES: The Inflation Reduction Act (IRA), enacted in 2022, allows Medicare to negotiate prices for high cost drugs and introduces cost caps for patients. This review considered the short-term impact and long-term effects of IRA on Medicare drug pricing, innovation incentives, and access to novel therapies.
METHODS: A targeted literature review of peer-reviewed journal articles and policy reports published between 2022 and 2024 was conducted using PubMed and Google Scholar. Inclusion criteria focused on analyses of IRA provisions concerning Medicare drug pricing, innovation in therapy development, and patient access metrics.
RESULTS: Five relevant studies highlighted the following: 1) Immediate Impacts: Streamlined pharmacy-level pricing is projected to improve affordability for millions of beneficiaries. Projected out-of-pocket costs have significantly reduced, especially for insulin ($35/month cap) and select Part D drugs. 2) Impact on Innovation: Analyses predict a moderate slowdown in the development of high-cost innovative therapies due to anticipated reductions in profit margins. However, policy proponents argue that incentivizing cost-effective and high-impact research can mitigate these effects. 3) Access: Medicare beneficiaries could benefit from improved affordability, but inequities will persist for patients outside Medicare coverage, raising concerns about systemic disparities. Additionally, early evidence shows regional variations in the impact of IRA, underscoring gaps in implementation. 4) Long-Term Projections: Economic models indicate mixed outcomes for the biopharmaceutical industry, with larger manufacturers able to prioritize incremental innovations or lower-risk therapies, while smaller firms face challenges in their R&D pipelines.
CONCLUSIONS: The IRA has achieved notable short-term successes in price negotiations. Long-term success may be affected by decreased innovation and equitable access across patient demographics. Monitoring of IRA implementation should consider not only short-term costs but also patient health and industry innovation in therapeutic pipelines. Further research is needed to assess whether improved affordability translates into better adherence, disease management, and overall health.