In August, the Centers for Medicare & Medicaid Services (CMS) announced a deal under the Biden-Harris administration, securing lower prices for 10 CMS-selected drugs. Set to start in 2026, this could save millions for Part D patients. The American Oncology Network (AON) Pharmacy analyzed how these negotiations could reshape pharmacy reimbursement.
“The Inflation Reduction Act (IRA), signed into law in August 2022, aims to provide significant financial relief for Medicare seniors by expanding benefits, reducing drug costs, and reinforcing Medicare,” explained Douglas Braun, PharmD, Senior Pharmacy Director at AON Pharmacy, during the American Society of Pharmacy Law’s Seminar.
Douglas Braun with Joan Martens, AON Pharmacy | image credit: BillionPhotos.com / stock.adobe.com
Braun, alongside Martens, led a session titled “Impact of IRA on prescription drug costs and Medicare D reimbursement.” They explored the IRA’s introduction in 2022, drug price negotiations, and the implications for pharmacies and patients, guiding pharmacy owners on preparing for the IRA’s 2025 provisions.
READ MORE: Prices Released for First 10 Drugs Selected in Medicare Negotiations
In dispensing specialty oncology drugs, Braun and Martens have observed patients’ financial strain, often spending $12,000 to $15,000 monthly. The IRA’s 2026 implementation and 2025 cost caps promise long-awaited financial relief.
“The benefit expansion will eliminate catastrophic costs and introduce a spending cap in 2025, aiding patients to maintain medication adherence year-round,” Martens noted.
By 2025, cost-sharing for prescription benefits will transfer from payers to insurers, with Medicare Part D assuming 60% of costs over the $2000 limit, reducing payer responsibility from 80% to 40%.
The IRA aims to enhance Medicare affordability for seniors. But how will pharmacies be affected? Financial hurdles in medication purchases impact pharmacies, jeopardizing their business model.
Braun discussed the IRA’s impact on pharmacies, highlighting that more accessible drugs boost patient therapy adherence, allowing pharmacies to fill more prescriptions.
They also covered future payment plans affecting pharmacies’ cash flow, allowing patients to pay monthly, shifting costs temporarily to plan sponsors. Pharmacists must educate patients about these plans.
“Pharmacies must identify ideal candidates and timing for signing up,” Braun stressed.
Although IRA effects won’t be felt until next year, pharmacists must stay informed about CMS updates and IRA provisions to grow their business successfully.
“We seek fair reimbursements. The next two years will reveal how this plays out, offering significant cost savings for patients on expensive therapies,” concluded Braun.
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