A poster presented at AMCP Nexus 2023 reported that payers believe implementing the Inflation Reduction Act (IRA) will impact Medicare Part D plans financially.
Most payers believe the implementation of the Inflation Reduction Act (IRA) will have a financial impact on Medicare Part D plans, according to a poster presented at AMCP Nexus 2023.
The researchers noted that the IRA includes multiple policy provisions related to Medicare Part D benefit design and drug pricing, including capping out-of-pocket costs for beneficiaries, which will affect US health care payers by shifting costs from the government and beneficiaries to manufacturers and Part D plans. They explained that insight into how US payers plan to respond to these Part D policies is needed to forecast how the IRA’s implementation may affect patient access and affordability.
Consequently, the researchers assessed payer perceptions of the IRA and its potential impact on Medicare Part D plans.
A double-blind, web-based survey was distributed to US health care payers between February 23, 2023, and March 7, 2023, using Cencora’s Managed Care Network, “a proprietary research panel of over 160 health care decision-makers, including health care executives, medical, and pharmacy directors, and other experienced individuals in managed care, representing over 310 million covered lives in the United States."
Their survey received 50 responses, with 66% of the respondents being pharmacy directors, 32% being medical directors, and 2% being contracting managers or directors.
From the survey, they found that 44% (n = 22) predicted the IRA to have an adverse financial impact on Part D plans and 34% (n = 17) expected a relatively limited financial impact. On the other hand, 10% of payers surveyed (n = 5) think the changes will result in a positive financial impact, while 18% (n = 9) are unsure about its impact. Additionally, 20% (n = 10) believe the policy changes will reduce the number of Part D plans their respective organizations offer, while 8% (n = 4) believe it will increase the number of plans they offer.
Also, the researchers noted that payers anticipate that the IRA’s Part D changes will lead to narrower formularies, with most payers anticipating somewhat (52%) or significantly (24%) more narrow formularies in comparison to the current design. Conversely, 20% expect relatively similar formulary coverage.
On the other hand, most payers expect greater utilization management because of increased financial liability for Part D plans. More specifically, 42% (n = 21) anticipate greater utilization management overall, and 32% (n = 16) anticipate greater utilization management for high-cost medications. Additionally, 16% (n = 8) expect change on a case-by-case basis, and 10% (n = 5) anticipate no change.
Lastly, the researchers found that most payers believe that the IRA will result in increased Part D plan premiums, 8% (n = 4) of which are anticipating a premium increase greater than 10%, 40% (n = 20) expecting an increase from 5% to 10%, and 18% (n = 9) anticipating an increase up to 5%. They noted that very few payers expect the Part D plan premiums to remain at their current levels (12%, n = 6), and no payers anticipate premiums to reduce lower than current levels.
The researchers also acknowledged their study’s limitations, one being that the survey’s responses reflected a select perspective as they were derived from a small sample size; due to the small sample size, results may not be generalizable to all payer organizations. Similarly, because the sample only consisted of those within the Cencora Managed Care Network, it did not represent stakeholder perspectives outside of it.
Despite these limitations, the researchers noted that the survey clearly showed that US payers expect the IRA to financially impact Part D plans, but more research is needed to better understand the exact impact.
“Most payers anticipate an increase in Part D premiums and greater use of utilization management strategies to contain costs, both of which carry potentially adverse implications for patient access and affordability,” the authors wrote. “Additional analysis is needed to examine the extent to which these changes will impact patient access to treatments and how these perspectives change over time.”
Ford C, Westrich K, Buelt L, Loo V. Payer reactions to the implementation of the Inflation Reduction Act: forecasting future changes to Medicare Part D plans. Presented at: AMCP Nexus 2023; October 16-October 19, 2023; Orlando.