Influence of IRA on medicine costs – Healthcare Economist


How a lot cash will IRA save Medicare? A paper by Hernandez et al. (2023) goals to reply this query. The strategies they use are as follows:

For the ten medicine doubtless topic to negotiation by Medicare in 2026 primarily based on 2020 gross spending and lack of exclusivity, we extracted 2020 knowledge from 5 sources: (1) web gross sales from SSR Well being; (2) complete models offered in america from IQVIA Nationwide Gross sales Perspective knowledge; (3) 2020 Half D claims from a 5% pattern of Medicare beneficiaries; (4) models and spending from the Facilities for Medicare and Medicaid Companies (CMS) spending dashboards; and (5) drug age from the US Meals and Drug Administration web site.

Based mostly on this method, the authors discover that:

The minimal low cost stipulated by the IRA exceeds 2020 rebates for under 4 of the ten medicine anticipated to be negotiated in 2026…These embrace etanercept (Enbrel), which will probably be topic to at the least a 60% low cost, up from an estimated rebate of 39.1%, and the most cancers medicine ibrutinib (Imbruvica), palbociclib (Ibrance), and enzalutamide (Xtandi), all of which will probably be topic to a minimal low cost of 25%, up from estimated rebates of 9%, 5.7%, and 15.0%, respectively. Based mostly on 2020 gross spending, the minimal required low cost on these 4 medicine mixed would generate financial savings of $1.8 billion

Why are solely 4 of 10 medicine prone to have decrease costs beneath IRA? The explanations is that refunds are already very excessive for six of the ten remaining medicine of curiosity.

You may learn the total paper right here.


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