How Much Will an IRA Save Medicare? The paper by Hernandez et al. (2023) aim to answer this question. The method they use is as follows:
For 10 drugs likely to be negotiated by Medicare in 2026 based on total 2020 spending and loss of exclusivity, we extracted 2020 data from 5 sources: (1) SSR Health’s net sales; (2) IQVIA national sales perspective (3) 2020 Part D claims from a 5% sample of Medicare beneficiaries; (4) Units and spend from the Centers for Medicare & Medicaid Services (CMS) Spending Dashboard; (5) Age of Drugs from the FDA website.
Based on this approach, the authors found that:
Of the 10 drugs expected to be negotiated in 2026, only 4 have IRA-mandated minimum discounts greater than 2020 rebates…including Etanercept (Enbrel), which will get at least 60% discount, up from projected 39.1% rebates, as well as cancer drugs ibrutinib (Imbruvica), palbociclib (Ibrance) and enzalutamide (Xtandi), all of which will be discounted by as little as 25%, up from projected discounts of 9%, 5.7% and 15.0%, respectively.Combined, the lowest discounts on these 4 drugs would save $1.8 billion based on total 2020 spending
Why are only 4 out of 10 drugs under the IRA likely to be less expensive? The reason is that rebates for 6 of the remaining 10 drugs of interest are already very high.
You can read the full text here.
