Medicare Changes in 2023: Summing up the IRA
Medicare Changes in 2023: Summing up the IRA
Calvin Berg, PharmD
Goodrich Pharmacy
On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (IRA). In an effort to combat high inflation rates, this bill aims to lower the deficit, increase domestic clean energy production, and, most significantly for pharmacy practice, lower prescription drug prices. Changes taking effect in 2023 include reducing out-of-pocket costs for insulin, imposing rebates on drug manufacturers due to drug prices being raised faster than the rate of inflation, and eliminating copays for adult vaccines that are covered under Medicare Part D.
Previously, Part D plans were required to cover at least one short-, intermediate-, and long-acting insulin at $35 monthly. Starting in 2023, all insulins covered by Medicare Part D must be available to Part D patients for a monthly copay of $35 or less. Notably, insurers do not have to cover every insulin product on the market. The average monthly cost of insulin products for Medicare Part D insulin users was $54 in 2020, so this provision will cut the average out of pocket cost for insulin by one third. Additionally, this means that patients in the coverage gap (or donut hole) will only spend $35 monthly on each insulin product, rather than 25% of the cost of the insulin, which should improve medication access for patients in the coverage gap.
In 2019 and 2020, the prices of about half of branded prescription drugs covered by Medicare Part D rose more rapidly than inflation. The IRA will impose rebates on drug manufacturers equal to the difference, using 2021 as an inflation benchmark starting in 2023. The funds accrued by these rebates will be placed into the Medicare Supplementary Medical Insurance fund. It is difficult to know what the exact impact of this change will be, but it will almost certainly reduce out of pocket costs for many Medicare Part D beneficiaries.
Finally, the bill will eliminate cost sharing for adult vaccines recommended by the Advisory Committee on Immunization Practices (ACIP) and covered under Part D. The most notable change here is the price of the Shingrix (recombinant zoster) vaccine. Previously, the average cost was $57 per dose for Medicare Part D beneficiaries. Eliminating this cost should remove a huge barrier to vaccine uptake and shingles prevention.
Reference:
- Cubanski J, Damico A. Medicare part D: A first look at Medicare Drug Plans in 2023. KFF. https://www.kff.org/medicare/issue-brief/medicare-part-d-a-first-look-at.... Published November 10, 2022. Accessed December 30, 2022.