Cencora VP of Reimbursement & Policy Insights Discusses Implications of the Inflation Reduction Act

PC: Recently, you hosted a webinar on the implications of the Inflation Reduction Act. Can you touch upon the main points of the presentation?

Ford: It wasn’t as much of a focus as much as what the latest is on the IRA, but more starting to help a lot of our manufacturer partners understand how you can address and adapt to a lot of the changes that are happening as a result of IRA. We certainly did give an update of what's happened since the law’s enactment from a regulatory standpoint. But we really wanted to start to provide our clients with an understanding of how to tackle this. For example, if you are selected for the Medicare drug price negotiation program, and you have to submit this huge amount of data to CMS, how can you leverage some of your medical communications? These are things such as your AMCP dossier or your pay your value proposition materials. Then, you leverage those for things to show how you can stack up and compete against an alternate therapy or meeting an unmet need. It was really just trying to help some of our manufacturing partners think through something like that.

On the redesign side with Medicare Part D, there’s an out-of-pocket cap for Part D patients. and that could then have a potential impact on patient assistance programs. How do you think about changing your eligibility criteria? How do you educate patients in advance of these changes happening in 25? And then finally, the other thing we really hit home on was thinking about how do you engage payers now in a much more competitive space, particularly in Medicare Part D? Because of these changes, how to engage them digitally? Payers really are looking to engage digitally more since the pandemic, rather than always having these one on one in person meetings. So how do you do that? How do you get your value messages across in this new environment? Those were really the three key areas that we focus on to again, help industry really understand how to do this.

PC: Since officially being passed into law back in August 2022, what do you believe has been the biggest impact of the IRA on the pharmaceutical industry thus far?

Ford: If we could boil it down, the biggest impact has been the greater pricing pressures that I think industry is facing. I think it’s pretty straightforward on the Medicare negotiation program. If you're selected, you're having to negotiate your price within Medicare, and it's likely to go down. There can be spillover effects outside of Medicare into commercial for those products that have been selected, and even those that aren't selected. I think even competitors of some of these products are going to face some of the pricing pressures from plants within the commercial space.

Even when we think about some of the benefits, that the IRA means for patient access, there could be some challenges and pricing pressures there. Certainly, in Medicare Part D, having a true out of pocket cap set at $2,000 is beneficial. But I think we have to think about the unintended consequences. There's going to be higher financial liability for manufacturers because of the benefit design. There could be greater and tighter formulary access issues and utilization management as a result of this. Again, that’s I think that’s really going to exacerbate the pricing pressures. It really comes down to that theme of pressure they're facing and how they think about adapting in this new environment.