The Inflation Reduction Act (IRA), which was signed into law this summer, includes many provisions to help reduce the cost of prescription drugs.
But the practical benefits are neither universal nor automatic. Even those who stand to see substantial savings may not actually see any cost reductions without support from a pharmacist.
Here, I’ll summarize the most important changes in the IRA related to prescription drug costs and explain how pharmacists will be critical to ensuring that American healthcare consumers actually enjoy the promised savings.
Key prescription drug savings in the Inflation Reduction Act
There are four main ways the Inflation Reduction Act will deliver prescription drug savings to Americans:
- Capping the cost of insulin at $35 per month
- Eliminating out-of-pocket costs for recommended vaccines
- Capping out-of-pocket spending for prescription drugs
- Reducing prescription drug prices
The first caveat to understand is that these savings apply to those on Medicare, not those who have private healthcare (e.g., employer-sponsored or insurance plans purchased from a public healthcare exchange).
The second thing to be aware of is that the specifics in the law limit use cases. For example, CMS describes the insulin price cap in these terms:
“Someone with Medicare who takes insulin covered by their prescription drug plan or through a traditional pump covered under Traditional Medicare will have access to each insulin for no more than $35 for a month’s supply. That person also won’t pay a deductible for their covered insulin products” (emphasis mine).
But formularies are adjusted each calendar year, meaning that patients may find the insulin they once used is no longer part of the formulary (i.e., no longer “covered by their prescription drug plan”). There is no requirement that the formulary stay the same.
Another consideration: diabetes is on the rise among patients under 65 (and so not yet eligible for Medicare). Diabetes affects 4.2 percent of 18- to 44-year-olds and 17.5 percent of those between 45 and 64.
The third caveat to note is that out-of-pocket caps begin in 2025, meaning no one will see that benefit for two years.
Finally, the reduction in prescription drug prices is also a couple of years off. While CMS will negotiate the first 10 drugs in 2023, it won’t publish new prices until 2024, and those prices won’t go into effect until 2025. The next 15 drugs will be negotiated and published in 2025, then take effect in 2026. And so on.
Because of all these caveats, the role of the pharmacist in helping patients navigate potential savings is hugely important. Let’s take a look at three ways pharmacists can help drive savings.
1. Enable immediate cost savings with existing knowledge and tools
As I mentioned above, many of the cost reductions in the Inflation Reduction Act won’t take effect for a year or more. But people need relief for prescription prices now: in the last year, 32 percent of Americans with health insurance took less than the prescribed dose of a medication because of cost.
Pharmacists are ideally positioned to help patients save money on prescription costs. As we cover in more detail elsewhere on the blog, pharmacists can help physicians and patients know when it makes sense to…
- Switch to branded generics.
- Seek retail offsets.
- Apply for assistance programs (i.e., PAPs and SPAPs).
- Recommend discount programs (e.g., GoodRx, SingleCare).
- Seek alternative dosages or forms.
Of course, to do this effectively and at scale, pharmacists need a holistic view – not just of each patient’s full medical profile but also of various formularies and evolutions in prescription drugs (e.g., when new biosimilars become available). RxLive provides this so that pharmacists can deliver personalized recommendations at scale.
Crucially, we also make it possible for pharmacists to communicate these recommendations with physicians so that nothing gets lost in translation (as it might if, say, a patient tries to ask for an alternative prescription by repeating what they remember reading about new savings from the IRA).
Read more about how our platform delivers these benefits.
2. Coordinate with patients and physicians to optimize drug regimens for savings as the IRA takes effect
Pharmacists can help patients manage costs by doing everything outlined above, regardless of what future laws may be passed and when they take effect. But the cost reductions specific to the IRA will also offer additional opportunities for pharmacists to help patients save money.As of today, we don’t know which 10 drugs’ prices will be negotiated and reduced. But recent AARP reporting highlighted Medicare’s top five drugs, all of which may be likely candidates (see Figure 1).
What we do know is that, once CMS has announced which medications’ prices are reduced, pharmacists will be on the front line of identifying patients who could save money by switching to those medications, coordinating with practitioners to recommend changes, and educating customers about their new prescription(s).
Then there’s insulin, which will be impacted in addition to the 10 other drugs. But as the careful wording in the law suggests, there’s plenty of nuance here that patients will need pharmacists’ help to sort out.
Again, the right tech is essential to provide that kind of care at scale.
3. Educate about (and administer) healthcare available in the pharmacy
A third key way pharmacists will be essential to the realization of cost savings is in patient education and care delivery.
Many people don’t know, for example, that pharmacists are certified vaccine administrators. When patients are in the pharmacy, pharmacists can tell them about vaccines newly available with no out-of-pocket costs, then administer these vaccines.
This kind of care delivery can translate to not only cost savings on the vaccine itself but also to cost savings on future care. Such as, a patient who gets a flu vaccine and is kept out of the hospital for a bad flu, or a whooping cough vaccine that prevents a part-time worker from illness and missed work.
Some prescription drug cost relief is coming. Pharmacists can amplify its impact
Even if all benefits of the Inflation Reduction Act took effect tomorrow and impacted the entire US population, we’d still need pharmacists to help patients realize the potential savings the new law promises.
Our healthcare system is built on the premise that competition will drive innovation; because of that, there are often dozens of comparable medications available. Physicians are not trained to know the nuances between all of those medications, nor do they have the resources to take cost into account when prescribing.
Pharmacists do have the necessary expertise. When supported with the right technology, they can combine that expertise with cost data to help personalize regimens so that they deliver the best possible treatment while also saving patients money. We built RxLive to offer exactly that support. If you’d like to hear more about how it empowers pharmacists to personalize care for every patient they work with, get in touch. We’d love to show you more.