Navigating the Impact of the Inflation Reduction Act: Assessing Current Realities and Future Trajectory

Since its inception, the Inflation Reduction Act (IRA)  has ignited discussions among healthcare stakeholders, prompting experts like those from ADVI Health, a life sciences data and consulting services firm, to assess its long-term implications and anticipated trajectory amid the upcoming 2024 presidential election.

In response, Marc Samuels, CEO of ADVI Health, cannot stress enough the far-reaching implications of the IRA’s Medicare Drug Price Negotiation Program.

“The IRA extends far beyond pricing, influencing various aspects of healthcare delivery and reimbursement,” said Marc. “Since 2022, we have been studying the IRA and counseling our clients on its impact on cost, market access, reimbursement, and further innovation and development. The ripple effects cannot be oversimplified. One of the more troublesome issues we see is that some of the most innovative therapies may be ensnared in the IRA's regulatory framework, stifling innovation and limiting patient access to groundbreaking treatments. That will have a tremendous impact for both pharma and patients alike.”

Lindsay Bealor Greenleaf, solution leader for the Federal and State Policy team at ADVI, sees the IRA Medicare Drug Price Negotiation Program impacting not only biopharma stakeholders and patients, but also physicians. Lindsay explained that while oncologists have always had to monitor coverage and payment developments related to Medicare and Medicaid beneficiaries, the new IRA reforms will have significant financial implications across all lines of business.

“The IRA will ultimately force oncologists, and other providers that frequently treat patients with physician-administered drugs, to become federal policy experts,” Lindsay said. “Even if you disregard the financial concerns, simply finding the time to analyze these changes is a massive burden for providers.” Guidance is forthcoming on how physician-administered drugs will be negotiated and how negotiated prices will affect physician reimbursement across payers.

In addition to analyzing the impact of the Medicare Drug Price Negotiation Program, ADVI has studied the implications of the IRA’s Medicare Part D benefit redesign. At AMCP 2024, the annual meeting of the Academy of Managed Care Pharmacy, ADVI experts Caitlin Sheetz, solution leader for the Strategic Analytics and Value Economics (SAVEs) team, and Peter Kardel, chief data scientist, presented findings on the effect of IRA Part D redesign on out-of-pocket expenses for heart failure patients. By analyzing Medicare Part D data from 2021-2022, they assessed how Part D benefit redesign may improve healthcare affordability. They discovered a significant increase in annual out-of-pocket costs from 2021-2022, particularly among patients with comorbidities. Initial assessments indicate IRA Part D redesign may have a role in moderating financial barriers to necessary healthcare for some of the more affected populations with heart failure, which is particularly important for Black or Hispanic beneficiaries under Medicare, who often face a variety of health and economic challenges. However, despite some financial relief from the redesign, significant disparities persist, especially for Black beneficiaries, highlighting the need for additional actions to alleviate healthcare financial burdens.

Next week, the team will present further analysis at ISPOR 2024, the leading global conference for health economics and outcomes research (HEOR), on Evaluating Healthcare Costs and Demographics of Medicare Part D Beneficiaries Impacted By First Top 10 Drugs Selected for Price Negotiations Under the IRA.  In this presentation, they will delve deeper into the IRA's implications for Medicare beneficiaries, especially minority groups, as they explore the nearly eight million Part D beneficiaries who spent over $3.4 billion in out-of-pocket costs on the ten drugs that are currently undergoing the Medicare price negotiation process.

Looking ahead, the impending 2024 presidential election casts an even bigger shadow over the IRA's trajectory with President Biden proposing to more than double the number of drugs subject to negotiation each year, and former President Trump potentially taking a less punitive and more transparent approach to implementation of the law.

Regardless of the outcome of the election, 2025 is projected to be a big year for IRA implementation. Stay ahead with ADVI. Learn more about our SAVEs team’s datasets and how we couple them with our Federal & State Policy expertise at ADVI.com or get in touch with the team at ISPOR 2024.