Inflation Reduction Act Cuts Drug Costs via Price Negotiation
TL/DR –
Bret Jackson, CEO of the Economic Alliance for Michigan, discussed the Inflation Reduction Act and its impact on healthcare in an interview with Pharmacy Times. He noted key aspects of the IRA such as the $35 cap on insulin, the cap on out-of-pocket costs for Medicare Part D that will come into effect in 2024, and the fact that drug companies can’t raise prices for Medicare faster than inflation. However, Jackson noted his concern that the IRA’s drug pricing negotiations apply only to Medicare patients, potentially creating two disparate drug markets: one for Medicare patients and a costlier one for those covered by private health insurance.
Pharmacy Times Interviews Bret Jackson on the Inflation Reduction Act
Bret Jackson, President, and CEO of the Economic Alliance for Michigan discusses the Inflation Reduction Act (IRA) in a recent interview with Pharmacy Times. Jackson sheds light on the cap on out-of-pocket costs for Medicare Part D, the timeline for additional drug price negotiations, and the changes that will be implemented by 2024.
About Bret Jackson & the IRA
Bret Jackson, a leading figure in the Economic Alliance for Michigan, offers insights on the IRA’s implications for health care professionals. He further highlights the $35 cap on insulin that came into effect this July, cost sharing elimination for certain vaccines, and the regulations preventing drug companies from raising their prices for Medicare faster than inflation.
Changes in Medicare Part D Costs by 2024
Jackson explains that in 2024, a cap on out-of-pocket costs for Medicare Part D will be introduced. This includes the elimination of the 5% home insurance for catastrophic claims in 2024 and a $2,000 limit on out-of-pocket maximums for Part D drugs in 2025, majorly affecting the patients’ expenses.
Drug Price Negotiations & Future Steps
The CMS has released the list of the first 10 drugs for price negotiations in 2026. Post the initial negotiation, there will be 15 more drugs added in 2027, followed by an additional 15 in 2028, and up to 20 drugs each year thereafter.
Impact of Drug Negotiations on Health Care Professionals
Jackson believes that drug negotiations will not majorly impact prescribers unless multiple suitable drugs are available for a patient, in which case cost-effectiveness becomes a consideration. However, he expresses concern that the benefits of the IRA will not extend to those covered by private health insurance, potentially creating two separate drug markets.
Future Updates for Health Care Professionals
Beyond the scope of the IRA, Jackson points out issues such as the concerning uptake for biosimilars like Humira and the problematic price markups for drugs for private health benefit plans. He emphasizes the need for continuous scrutiny of the drug market to address these concerns.
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