Finding a safe anchorage in navigating the uncertainties of Inflation Reduction Act (IRA)
The Inflation Reduction Act (IRA) passed into US federal law last year to provide financial relief for people with Medicare by improving access to affordable treatments. These include: a $35/month limit on copayments for insulin covered under Part D or with durable medical equipment (DME) under Part B; elimination of out-of-pocket cost sharing for adult vaccines covered under Part D, Medicaid, and CHIP (Children’s Health Insurance Program) programs; expanded eligibility for low-income subsidies, and a $2,000 annual cap on Part D patient out-of-pocket costs for the first time ever.1
However, several of the act’s key provisions have resulted in major implications across the biotech and pharmaceutical industry to reevaluate and reprioritize their research and development budgets and portfolio. Different manufacturers have had to terminate pipeline assets based on the “unintended” effects of the new rules. Other manufacturers have forecast a drop in revenue due to price controls that could harm innovation.2 Most recently, manufacturers have filed lawsuits challenging the merits of the law.3
While the uncertainties and full implications of the law might evolve given the upcoming presidential elections next year, what is certain is that, as CMS moves forward with the implementation of the IRA, key data elements will need to be developed to meet specific criteria from manufacturers as outlined by CMS. For example, Section C, focused on research and development (R&D) costs and recoupment, has a new question to include R&D acquisition costs within a 1000-word count limit. Section I focused on Evidence on Alternative Treatments contains the following questions and word and citation limits:
Key IRA Updates and Upcoming Timelines
Manufacturers should be planning for products that qualify for negotiation before CMS publishes Part D selected drug list on September 1st
Reference: https://data.cms.gov/summary-statistics-on-use-and-payments/medicare-medicaid-spending-by-drug/medicare-part-d-spending-by-drug (accessed 04/18/2023. Note – With data being from 2021 it may understate revenue and companies with drugs at the top of the list are not necessarily the most exposed
As September 1st approaches for CMS to publish their list of 10 Medicare Part D drugs, manufacturers must focus on distilling and communicating the evidence package submission as a critical part of the negotiation process that CMS will use to determine maximum fair price (MFP) initial offers. Then additional information will be required to support counteroffers for selected drugs for initial price applicability year 2026 in 2024.
If you need help or guidance in this journey AESARA can help as we are:
1. Experts in Synthesizing Evidence Packages:
- We have extensive experience working with several clients across the biotech industry on distilling and synthesizing copious sources of information available to meet the word count requirements specified by CMS.
- We stay up to date with the latest regulations and guidelines to help ensure you are well-prepared and compliant.
2. Experienced Industry Veterans:
- Our team provides prior biopharma experiences with HEOR technical expertise and strategic thinking. This multidisciplinary approach allows us to craft compelling narratives to maximize successful submissions as part of IRA negotiations for eligible drugs identified.
Contact us if you would like to learn more about AESARA’s impactful storytelling.
- Centers for Medicare and Medicaid Services. Accessed online August 3, 2023: https://www.cms.gov/inflation-reduction-act-and-medicare
- Government Price Controls Limit Access to Medicine and Stifle American Innovation. Accessed online June 29, 2023: https://www.uschamber.com/health-care/government-price-controls-limit-access-to-medicine-and-stifle-american-innovation
- Biospace Biopharma Lawsuit Tracker 2023. Accessed online August 3, 2023: https://www.biospace.com/article/biospace-lawsuit-tracker-2023-alexion-portola-liquidia-and-others-under-scrutiny/