AMCP’s Third Inflation Reduction Act (IRA) Workshop—Looking Ahead at Implementation

Because of the breadth and depth of the Inflation Reduction Act (IRA), AMCP and others are very focused on what implementation will entail for the provisions effective Jan. 1, 2025. To help raise awareness and provide a forum for common questions and shared learning, AMCP recently hosted its third iteration of the IRA workshop series, bringing together health plans, pharmaceutical manufacturers, PBMs, research institutes, and patient advocacy organizations. 

It turns out our workshop was very timely, with news breaking today that the Biden administration released results of the first negotiated prices on 10 prescription drugs under Medicare. This long-awaited development gives us data and information to pore over for some time, but this is one milestone in a long, important path toward full implementation of the IRA. Indeed, while today’s data release will be informative, we can expect even larger takeaways early next year when we learn why the Centers for Medicare & Medicaid Services (CMS) negotiated prices the way they did. 

Even as health care industry stakeholders focus on the new pricing data, it’s important to keep building perspective on various moving parts over the coming months that will have a tremendous impact on the IRA’s overall success. Our workshop kicked off with a senior consultant at Milliman examining the anticipated opportunities and challenges as CMS negotiates the maximum fair price (MFP) for drugs. Patients will now have an out-of-pocket maximum ($2,000), which will make a positive difference in drug affordability and care. The conversation stressed that plan sponsors will need to collaborate with physicians to control drug demand and renegotiate contracts with PBMs, forcing PBMs to create value beyond rebates. 

We also heard from two Partners from Manatt, Phelps & Phillips LLP about new programs coming into play. The first spoke about the Medicare Part D Prescription Payment Plan (M3P), which is intended to “smooth” patients’ out-of-pocket costs. This “layaway” style payment plan for the year is intended to have patients pay the lesser of their actual incurred costs or monthly maximum payments to reduce the burden of one prohibitively high payment. 

The second conversation outlined the IRA’s Initial Price Applicability Year (IPAY) 2027, specifically around building the Medicare transaction facilitator (MTF) that will make data exchange—and maybe payments—possible between supply chain entities. Based on the feedback from IPAY 2026, CMS intends to adjust the program to improve patients' experiences and see how the process can be better improved for IPAY 2027. Based on our discussion, it is clear that participants will need to be patient as the process goes into effect. CMS is building this based on expectations rather than lived experiences, so the program is likely to change in each of the first few years until CMS feels it hits the mark. 

We closed out the workshop with a panel, featuring speakers from the American Diabetes Association and National Health Council, which focused on the most important factor behind all of these changes: patients' health outcomes. The health care ecosystem needs to support patients who are navigating these changes by helping them understand how the law will impact their health outcomes. Communication will be key to success for all parties involved. As such, CMS should have an open feedback loop with patients to collect their thoughts on the process and have a framework in place to identify and solve any challenges. This will help ensure CMS incorporates the patient voice as it addresses items along its path to IRA implementation. 

This workshop builds on our past momentum and moves us closer to a greater understanding of the wide range of effects that will arise from the IRA. As managed care pharmacists, we all have a role to play in shepherding along this landmark law and creating value for our patients and stakeholders. Fostering conversations around the IRA will give us all a better idea of what to expect before and after IRA implementation. We look forward to discussing the future of improving our health care system and patient care under the IRA!

Geni Tunstall
Director, Regulatory Affairs
Published on Aug. 15, 2024

Other Blogs in Series:

• IRA Workshop Part 1
• IRA Workshop Part 2

Related Resources:

• IRA Resource Center
• Legislative and Regulatory Sessions at Nexus 2024 
• Education CE "An Update on IRA: What's Your Perspective?" (Free for AMCP Members)
• AMCP Podcast "AMCP Legislative Priorities Episode 2" by Adam Colborn

With the implementation of the IRA well underway, the Drug Price Negotiation program, Part D redesign, and inflationary rebate provisions are painting an exceedingly complex landscape for pharmaceutical companies, health plans, PBMs, patients, and government stakeholders. That’s why your organization will want to take advantage of an opportunity to help shape the implementation of the IRA. Join a select group of colleagues at AMCP’s second IRA Virtual Workshop Series on Nov. 15, 2023. Your organization’s attendance grants access to a roundtable of managed care experts and thought leaders. This “surround-sound” initiative grants the opportunity to be heard, navigate the IRA and its downstream effects, and unpack the law’s key provisions. These workshops offer your organization the opportunity to lend its expertise and have its voice heard in the discussion around the IRA. 

Contact @email now to secure your organization’s spot.