As we start the new year, it is important to make sure our strategies reflect trends and changes influencing the healthcare landscape. Since August of 2022, when the President signed the Inflation Reduction Act (IRA), the new authority granted to CMS allowing Medicare to negotiate the price of medicines has been highly debated. And while this element of the bill has captured the headlines, there are many other aspects that should be top of mind. Aspects restructure Part D while attempting to lower drug costs for our most vulnerable population, expand benefits, and seek to improve access and affordability for patients in a stepwise manner over time. A few examples are listed below.
- Drug manufacturers are required to pay rebates if their prices for certain Part D and Part B medicines increase faster than inflation.
- Traditional Medicare recipients may pay lower coinsurance for some Part B drugs if the medicine’s price increases faster than inflation.
- CMS has selected the first ten medicines for price negotiation.
- In the new year, individuals who fall into the Medicare catastrophic phase of the benefit will no longer pay coinsurance or co-payments during that phase.
- In the new year, the low-income subsidy program (aka LIS) under Part D will be fully available to certain Medicare recipients who earn less than 150% of Federal poverty level.
- In 2025, Medicare recipients won’t pay more than $2,000 out-of-pocket for prescription medicines.
- In 2025, the new Manufacturer Discount Program will require manufacturer discounts for applicable Part D medicines both in the initial coverage and catastrophic phases.
- And in 2025, CMS will announce the next set of 15 Part D medicines for negotiation.
That’s a lot to think about as the bill goes well beyond price negotiation. These far-reaching issues will have a broad and significant impact on the strategy and commercial success of future medicines. Here are some questions you should be asking if you haven’t already.
- Are you thinking about your pricing strategy differently?
- Is your organization capable and ready to effectively negotiate with CMS?
- How are you thinking about indication selection and launch prioritization?
- What impact will these changes have on gross-to-net (GTN)? What can be done to improve GTN?
- How might patient access be impacted? How might patient support programs need to change?
- Is there upside to be captured because patient out-of-pocket expenses may be decreasing?
Now is the perfect time to step back and evaluate your approach to pricing and patient access. If you need help, contact us at info@A3Access.com.