OBJECTIVES: There is little doubt that the Inflation Reduction Act will influence payer behavior due to it far-reaching and multi-faceted nature, but no consensus on precisely how they will react, what contracting strategies they will deploy, or how their utilization management tactics will change going forward. This survey seeks to elucidate payer perceptions of the law, as well as its effects on the coverage and management of high-cost therapies.

METHODS: A survey of 20 payers was conducted using Qualtrics. The respondents were queried on various provisions of the IRA, such as CMS drug price negotiation, the Medicare Part D redesign, the inflation rebate provision, and role of government subsidies. Although the IRA applies to Medicare, commercial payers were also surveyed in order to understand how it will impact other books of business.

RESULTS: Payers will respond to the IRA by narrowing formularies to compensate for increased cost-sharing of Medicare Part D therapies and the limit on Medicare premium increases. They will also expect the lower Medicare prices of therapies subjected to CMS negotiation to be applied to the commercial book of business. They did not indicate a strong likelihood of exiting many markets, citing the offsetting impact of government subsidies, but may do so in certain high-cost geographies where increased medical expenses cannot be covered by substantially higher premiums.

CONCLUSIONS: Pharmaceutical companies should be prepared for significant shift in payer behavior in the years ahead, starting in 2025, when the Medicare Part D redesign is implemented, and 2026 when the negotiated Maximum Fair Price on 10 high-cost therapies is implemented. Increased clinical differentiation and evidence (from both clinical trials and RW studies), will be needed to ensure strong coverage and patient access to novel therapies, especially in TAs that have an incumbent with a low, negotiated Maximum Fair Price.