US Inflation Reduction Act (IRA)
Understanding and navigating the changing US market access environment
The Inflation Reduction Act (IRA), a landmark policy change signed into law in 2022, represents the most significant health care legislation in the United States since the 2010 Affordable Care Act, and has widespread implications. Intended to provide substantial financial relief for millions of people, the goal of the IRA is to ensure and protect health benefits, lower drug costs for seniors and strengthen the standing of Medicare for the future. The following health care provisions will be or have been implemented as a result of the IRA:
- Medicare prescription drug price negotiations
- Drug manufacturer rebates for price increases beyond the inflation rate
- Reduction in out-of-pocket spending for Medicare beneficiaries
- Limits to monthly cost-sharing for insulin
- Elimination of cost-sharing for adult vaccines
- Expanded eligibility for Part D low-income subsidies
- Further delay in the Trump administration’s drug rebate rule
These changes, specifically the ability for Medicare to negotiate drug prices, have a substantial impact on biopharmaceutical companies’ revenues and the return on investments made in their pipelines.
While this new regulation represents a monumental shift to ensure affordable health care for millions of seniors in the U.S., it has sparked concerns among various stakeholders across the health care continuum. As manufacturers face growing scrutiny on product value, many questions may hinder the path forward for certain assets, requiring evidence to:
- Demonstrate a product’s comparative effectiveness against available therapies
- Identify how a product addresses a key unmet need
- Determine the impact of a product on various patient outcomes
- Establish value in specific populations of interest (e.g., the Medicare-aged population)
Inflation Reduction Act implementation timeline
Negotiations are underway between the U.S. Department of Health and Human Services and participating drug companies for the first 10 Part D drugs selected for negotiation. This initial group of products comprises a variety of drugs, including anticoagulants, antidiabetic agents, and therapies for heart failure, autoimmune conditions, chronic kidney disease and B-cell cancers. These drugs cost Medicare approximately $50.5 billion between June 1, 2022 and May 31, 2023, about one-fifth of the total Medicare Part D-covered prescription drug costs in that time period. Negotiated prices for these initial 10 drugs will go into effect on January 1, 2026, with additional drugs identified and assessed each year through 2031.
Anticipating and planning for a competitive advantage
Now more than ever, it is critical to have an in-depth understanding of the new IRA regulation and its complex nuances. The right partner will provide you with industry-leading market access expertise to help you navigate this major change and create a road map to optimize planning and success in the U.S. Minimize your market access challenges by:
Engage with a strategic partner to achieve success
Shape your plan with insights based on our close and continual monitoring of all aspects of the IRA. With greater understanding, early strategic planning and ongoing communication with regulators, you’ll gain insights to drive critical decisions that move your product forward successfully. Partnering with us provides you with:
Established relationships with relevant market stakeholders to facilitate insight gathering
Move your program forward with speed and agility with early stakeholder engagement. Ensure alignment on challenges, unmet needs, evidence needs and market access strategies by engaging with critical industry stakeholders, including payors, providers, patients, distributors, specialty pharmacies, Healthcare Utilization Hubs (HUBs) and others.
Identification of critical evidence to stay ahead of changing demands
Receive actionable strategic insights―from pricing strategies to value message testing and innovative value demonstration and delivery―to demonstrate product value and optimize market access for new launches as well as marketed products.
Industry-leading expertise in optimizing your asset’s value story
Strengthen your ability to achieve accelerated access and commercial success with robust integrated plans that include clinical, economic and real-world data (RWD) to generate evidence that supports your product’s value proposition with providers, patients and payors.