Expert: Price and Drug Negotiation Provisions Through the Inflation Reduction Act, Eliminating Costs

Pharmacy Times interviewed Bret Jackson, President, and CEO of the Economic Alliance for Michigan on the current landscape of the Inflation Reduction Act. Jackson underscores the cap on out-of-pocket costs for Medicare Part D and the changes that will go into effect in 2024. Jackson notes the timeline for additional drugs that will be chosen for price negotiation in the future.

Pharmacy Times

Can you introduce yourself?

Bret Jackson

Well, thanks for having me. My name is Brett Jackson. I'm President and CEO of the Economic Alliance for Michigan. I'm delighted to be able to join you today and talk about the Inflation Reduction Act.

Pharmacy Times

Can you provide an overview of the current landscape of the IRA, and what the implications will be for health care professionals?

Bret Jackson

In fact, I think most of what the people who are looking at the Pharmacy Times are most interested in are the drug negotiation provisions. I think we're going to touch on those in in a minute — but there's still so many different things that are part of the IRA that was passed last year that we'll talk about. That's including the $35 cap on insulin that started just July 1st of this year, out of pocket reductions that we'll touch on in a second. For Medicaid and Medicare patients, there's elimination of cost sharing of certain vaccines and drug companies also cannot raise their prices for Medicare faster than the rate of inflation. So, lots of impact in the health care in the drug markets.

Pharmacy Times

In 2024, there will be a cap on out-of-pocket costs for Medicare Part D. What should health care professionals know about the changes going into effect in 2024?

Bret Jackson

There's two different out of pocket reductions in 2024. There's an elimination of the 5% home Insurance for catastrophic claims, that's the one that's taking effective 2024. The one in 2025 is a $2,000 limit on out-of-pocket maximums for drugs in Part D—that's the one that most will hit most people in the pocketbook.

Pharmacy Times

What can we expect for the 10-prescription drug that are currently chosen for price negotiation? What are the next steps for these drugs?

Bret Jackson

CMS published the list of the 10 drugs on September 1 of this year, but the price negotiations for those 10 drugs will not take effect until January 1 of 2026. We still have a long way to go before purchasing those drugs through Medicare are going to see any price help until January 1, 2026. We've got a long way to go.

Pharmacy Times

In the future, CMS will select more drugs to be covered under the IRA. What will the timeline be for the additional drugs?

Bret Jackson

So, as I said, the first 10 drugs, the prices kick in January 1, 2026. After that, there will be 15 more drugs that will be negotiated, that will come into play. Those prices will be negotiated and implemented in 2027. Again, 15, more drugs for 2028 in up to 20 drugs each year after 2028, each year.

Pharmacy Times

How will drug negotiations affect prescribers and other health care professionals as well as their role for patients?

Bret Jackson

Well, I think no matter what drugs CMS is negotiating, I think what prescribers always need to do is make sure they're treating the patient for the right drug at the right time. They shouldn't be concerning themselves with what drugs are being negotiated or not. Unless there are multiple drugs that the patient could benefit from, that are right for the patient at the time, in which case, yes, we of course, would love prescribers to be able to pick the drugs that are most cost effective for patients. But for everybody else, there's a bigger issue. The drug pricing negotiations only apply to Medicare patients, so there's a whole host of people that are covered by private health insurance that will not see benefits from the Inflation Reduction Act. We are really concerned that there will be two different drug markets in this country — one for Medicare patients, and another for a much higher drug market or drug costs for those covered by private health insurance.

Pharmacy Times

Are there any other important updates for health care professionals going into the next few years?

Bret Jackson

We covered the IRA, but there's a lot of things that the IRA didn't take care of. We are going to continue to look at drug markets in general and I'll mention some specifics that are concerning to us. The uptake for biosimilars for Humira are very concerning. We want to ensure that there's a competitive marketplace for Humira and any other biosimilars that are coming out, not just for that drug, but for a lot of drugs in the pipeline. We also are looking at problems with 3, 4 to B pharmacies and how drugs are being bought for that intended audience. Then we are also constantly extremely concerned about price markups for drugs for private health benefit plans on the medical side of the benefit, not just the pharmacy side. So many more things that are happening in the in the drug space that that we are paying attention to that we think needs to be addressed, were not covered by the Inflation Reduction Act.