One year lat­er: The up­sides and down­sides of the In­fla­tion Re­duc­tion Act

Wednes­day is the one-year an­niver­sary of Pres­i­dent Joe Biden sign­ing the In­fla­tion Re­duc­tion Act in­to law, open­ing the door to the first gov­ern­ment ne­go­ti­a­tions of drug prices ever, as well as oth­er cost-con­tain­ing mea­sures that have al­ready start­ed to kick.

Ac­cord­ing to a new gov­ern­ment re­port on the IRA an­niver­sary, high­lights of what the new law has done in­clude:

• Cap out-of-pock­et costs for Part D ben­e­fi­cia­ries at $2,000 an­nu­al­ly, which the re­port es­ti­mates will re­duce en­rollee out-of-pock­et spend­ing by about $7.4 bil­lion an­nu­al­ly.
• Cap out-of-pock­et costs for cov­ered in­sulin prod­ucts in Medicare at $35 for each month­ly pre­scrip­tion un­der Part D and Part B. About 1.5 mil­lion Medicare ben­e­fi­cia­ries who use in­sulin would have saved about $750 mil­lion in 2020 had these caps been in place, the re­port says.
• Elim­i­nat­ed en­rollee cost shar­ing (an­nu­al out-of-pock­et costs were $234 mil­lion for 2021) for adult Medicare Part D vac­cines rec­om­mend­ed by the CDC’s Ad­vi­so­ry Com­mit­tee on Im­mu­niza­tion Prac­tices.
• Pe­nal­izes bio­phar­ma com­pa­nies for prices that rise faster than the rate of in­fla­tion.

But on the flip side, the bio­phar­ma in­dus­try and oth­er pro-in­dus­try in­ter­ests have sued the fed­er­al gov­ern­ment over the ne­go­ti­a­tion pro­vi­sions of the IRA, which these groups liken to price con­trols, say­ing that even though they don’t take ef­fect un­til 2026, they are al­ready hav­ing a chill­ing ef­fect on in­no­va­tion.

Unlock this article instantly by becoming a free subscriber.

You’ll get access to free articles each month, plus you can customize what newsletters get delivered to your inbox each week, including breaking news.

SIGN UP LOG IN BECOME A PREMIUM SUBSCRIBER