How the Inflation Reduction Act Will Impact Pharmacy Reimbursement | ASPL 2024
Pharmacy experts from AON Pharmacy in Florida discussed the Inflation Reduction Act and how it affects reimbursement for Medicare Part D drugs.
Earlier this year in August, the Centers for Medicare & Medicaid Services (CMS) announced that the Biden-Harris administration reached an agreement on its negotiations with manufacturers for lower prices on the 10 CMS-selected drugs.1 Going into effect at the start of 2026 and potentially yielding millions in savings for Part D patients, representatives from American Oncology Network (AON) Pharmacy discussed how these drug price negotiations are expected to impact pharmacy reimbursement.2
“Inflation Reduction Act (IRA), as we all know, signed into law middle of August 2022. The intent of the law was designed to provide meaningful financial relief for millions of seniors with Medicare by expanding benefits, lowering drug costs, and strengthening Medicare for future use,” said Douglas Braun, PharmD, RPh, CPh, CSP, Senior Pharmacy Director at AON Pharmacy.2 At the American Society of Pharmacy Law’s 50th Developments in Pharmacy Law Seminar, Braun was joined by his colleague, Joan Martens, CPhT, RPhT, Pharmacy Operations Supervisor at AON Pharmacy.
At the American Society of Pharmacy Law’s 50th Developments in Pharmacy Law Seminar, Braun was joined by his colleague, Joan Martens. | image credit: BillionPhotos.com / stock.adobe.com
The pharmacist duo hosted a session titled “Impact of Inflation Reduction Act on prescription drug costs, access, and the financial impact of Medicare D reimbursement.” From the introduction of the IRA in 2022 to drug price negotiations and the future impact on pharmacies and their patients, Braun and Martens took a deep dive into Part D reimbursements and covered exactly how pharmacy owners and dispensers can prepare for the launch of the IRA’s provisions in 2025 and beyond.
READ MORE: Prices Released for First 10 Drugs Selected in Medicare Negotiations
In their experience dispensing specialty oncology drugs, Braun and Martens have seen the immense financial hit patients have received when purchasing their medications. With out-of-pocket spending reaching $12,000 to $15,000 a month for these patients, medication adherence has started to become a growing issue. But with the IRA taking over in 2026, and out-of-pocket cost caps in 2025, they predict patients will finally get the financial relief they deserve.
“Expanding the benefit [will], first of all, do away with that catastrophic percentage, and then in 2025, actually put a cap on the spending. That's going to be a tremendous benefit and allow patients to stay on their medications throughout the whole year, not having to make tough financial decisions. Do I eat, do I pay rent, or do I take my medication?” said Martens.2
Looking to 2025, cost-sharing for prescription drug benefits will also shift from the payer to the insurer. Medicare Part D plans will now have to consume 60% of the liability for costs over the $2000 threshold. Payers’ cost-sharing responsibilities move from 80% to 40% come 2025.3
The IRA was designed to make Medicare services more accessible and affordable for seniors. While these patients will be reaping the benefits of the IRA’s legislation, how exactly will pharmacies be impacted? Financial challenges have plagued patients across the country when it comes to purchasing medications. But it’s the pharmacists dispensing these medications who experience even greater financial challenges that jeopardize the entirety of their business model.
When discussing how the IRA will impact pharmacies, Braun discussed the domino effect of drugs becoming cheaper and more accessible. “So what's the impact on pharmacies? More patients can stay on therapy. We get to fill our scripts. Patient gets to stay on therapy longer,” he said.2 Prior to the IRA, as Martens previously mentioned, patients were forced with the decision of whether to eat or take their medications. Now, with decreased costs and increased access, pharmacists have better opportunities to reach more patients and dispense more medication.
They also discussed future payment plan options and how it could impact pharmacies’ cashflow. The new payment plan will allow patients to shift their medication costs to a monthly bill, allowing them to spend $0 at the pharmacy counter. Each month, they would be billed for their medications and the plan sponsors would cover costs in the meantime. Braun said it would be on the pharmacist to educate patients on payment plan options.
“The onus is going to be on the pharmacy to educate these patients. Who's an ideal candidate to sign up? When is the right time to sign up?” he continued.2
While patients and pharmacies won’t feel the impact of the IRA until next year, there is a myriad of information for pharmacists to understand going into 2025. It is a new and unprecedented time for reimbursements in the pharmacy industry. Pharmacists must stay up to date with CMS and all provisions under the IRA if they want to continue to grow their business and reach more patients.
“We're not asking for a lot; we're just asking to be reimbursed. So how that all plays out over the next 2 years, we’ll wait and see. [It’s not all] good news, but some of it is good news for our patients. There's going to be significant cost savings for our patients on high-cost therapies,” concluded Braun.2
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References
1. Negotiating for lower drug prices works, saves billions. News Release. CMS. August 15, 2024. Accessed August 15, 2024. https://www.cms.gov/newsroom/press-releases/negotiating-lower-drug-prices-works-saves-billions
2. Braun D, Martens J. Impact of Inflation Reduction Act on prescription drug costs, access, and the financial impact of Medicare D reimbursement. Presented at: 2024 Developments in Pharmacy Law Seminar; November 7-10, 2024; Phoenix, AZ.
3. The ‘Inflation Reduction Act’ raising costs on seniors higher premiums, less access, fewer choices. Council for Affordable Health Coverage. July 2024. https://cahc.net/wp-content/uploads/2024/07/CAHC-IRA-Part-D-Issue-Brief.pdf
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