Health Affairs March 2, 2023
The Inflation Reduction Act (IRA) poses a threat to pharmaceutical companies selling branded drugs that are blockbusters in the Medicare program. Provisions in the IRA will significantly impact these key assets, notably by forcing manufacturers to enter into price negotiation with the Department of Health and Human Services (HHS) for the highest spend drugs under Medicare Part B and D and the requirement to pay rebates to Medicare if drugmakers raise prices faster than inflation.
Historically, pharmaceutical companies have been inventive at mitigating regulatory penalties and using regulatory loopholes (using tactics known as gaming). By introducing new legislation that attempts to curb pharmaceutical costs, the IRA will spur the creation of a whole new set of strategies and tactics to...
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