Professor of Epidemiology and Medicine Johns Hopkins Bloomberg School of Public Health, United States
Background: The 2022 Inflation Reduction Act authorizes Medicare to negotiate the prices of ten drugs in 2026 and additional drugs thereafter. The characteristics of beneficiaries taking these specific drugs could be important to policymakers.
Objectives: To characterize Medicare beneficiaries who use the ten prescription drugs (“negotiated drugs”) most likely to be included in the Drug Price Negotiation Program in 2026.
Methods: Retrospective nationally representative cohort study of a 20% sample of Medicare Part D beneficiaries from 2020 (n=10,224,642). Negotiated drugs were selected based on Medicare Part D spending, years on market, and likelihood of generic or biosimilar entry using criterion specified in the Inflation Reduction Act. Sociodemographic and clinical characteristics of beneficiaries taking the negotiated drugs are compared between the ten drugs and compared to all other Part D beneficiaries. Medicare spending, beneficiary out-of-pocket costs, and low-income subsidy utilization in 2020 between negotiated and non-negotiated drugs were compared.
Results: The ten negotiated drugs included small molecule and biologic drugs used to treat cancer, diabetes, and cardiovascular disease. These drugs were used by 11.9% of beneficiaries; they represented 2.7% of Medicare Part D claims and 17.6% of Medicare Part D spending in 2020. Mean Part D spending was largest ($10.0 billion) for apixaban and lowest ($2.0 billion) for budesonide/formoterol. Beneficiaries taking an insulin product were more likely to be Black (20%), live in lower-income zip codes and outside of urban areas than beneficiaries using the other drugs. Beneficiaries using the two cancer drugs had significantly higher out-of-pocket costs and were more likely to be White (85%) and live in high income areas (37%). Total Part D annual out-of-pocket spending was highest for beneficiaries taking ibrutinib ($5,835) and lowest for beneficiaries taking budenoside/formoterol ($664). Beneficiaries without low income subsidies paid much more out-of-pocket than beneficiaries with low-income subsidies. Beneficiaries taking a negotiated drug had more comorbidities compared to other Part D beneficiaries, particularly those using insulins.
Conclusions: The first ten negotiated drugs represent almost 20 percent of Part D spending. The potential benefit from negotiation will vary by drug and for beneficiaries in certain sociodemographic categories.
