Article Summary –
The Inflation Reduction Act (IRA) was signed into law in August 2022 to provide financial relief for Americans with Medicare via expanded benefits and lowered drug costs. However, questions remain about the operationalization of the manufacturer’s fair price within the IRA’s Medicare drug price negotiation program. A survey showed that 44% of participants anticipate that the IRA will negatively impact Part D plans, with an expected result of narrower formulary design, higher utilization management, fewer Part D plans, and higher premiums.
The Impact of the Inflation Reduction Act (IRA) on Medicare
Enacted in August 2022, the IRA promised financial relief to Americans with Medicare coverage by enhancing benefits and reducing prescription costs. However, two years later, uncertainties remain about the program, especially the Medicare drug price negotiation feature.
Corey Ford, the VP of Reimbursement and Policy Insights at Cencora, states that while stakeholders have received guidance regarding required manufacturer data submission, there is still confusion on implementing the manufacturer fair price.
Survey Results: Predictions on IRA’s Influence on Medicare
Cencora conducted a survey with its Managed Care Network members at the 2023 AMCP Nexus Meeting. Of the 50 participants, 44% expected the IRA to negatively impact Part D plans financially, while 34% forecasted a more limited impact. The majority anticipated that IRA-induced changes would lead to a narrower formulary design.
The Future of the IRA
Looking ahead, Ford believes that 2024 data could hint at what’s to come. Survey results indicated anticipated challenges, including increased utilization management and decreased Part D plan availability. “2024 gives us real data,” said Ford. “We’ve seen a roughly 12% drop in the total number of standalone drug plans, increased utilization management, and higher premiums.”
Ford shared his insights during the Asembia Specialty Pharmacy Summit, AXS24, in Las Vegas, Nevada. Find more coverage from AXS24 here.
References
1. Inflation Reduction Act of 2022. Department of Health and Human Services. Reviewed March 26, 2024. Accessed May 3, 2024. https://www.hhs.gov/inflation-reduction-act/index.html
2. McCormick B. How payers expect the IRA to financially impact Medicare Part D plans. AJMC. October 24, 2023. Accessed May 3, 2024. https://www.ajmc.com/view/payers-expect-the-inflation-reduction-act-to-financially-impact-medicare-part-d-plans
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