Mitigating IRA-Associated Risks to a Manufacturer’s Pipeline Products

IRA implementation calls for life sciences manufacturers to reassess indication sequencing, launch pricing, and market access strategies for pipeline products. A manufacturer engaged us to evaluate the implications of Medicare drug price negotiation, Part D benefit redesign, and inflation-based rebates for 11 of its pipeline products to identify, characterize, and recommend strategies to mitigate associated risks to those products. The client sought actionable business intelligence on how these IRA policies may affect market dynamics such as pricing, reimbursement, competitor response, and payer contracting pressure.

We created an IRA risk assessment and impact matrix to understand the risk profile of each of the client’s 11 pipeline products, given product-specific features driving IRA-related risks (e.g., orphan or rare disease indication, plan benefit coverage, forecasted sales, Medicare exposure, and timeline of current and future competitors expected to be subject to price negotiation).

For most products assessed, Medicare drug price negotiation poses the greatest risk, as the maximum fair prices set for competitor products will exert downward pressure on prices for all other products approved to treat the same indication. This dynamic raises questions, such as how indication sequencing, launch timing, pricing, and gross-to-net strategies might be adapted to mitigate access risk in the new environment (e.g., combining premium launch price with an assertive contracting and rebating strategy, increasing upfront investments in high-risk clinical value and evidence development to support premium pricing and clinical differentiation, or increased rebating for improved payer positioning and access against negotiated products in the same class). For every product assessed, we translated the type, timing, and magnitude of IRA-associated risks into a series of recommendations to guide development decisions and downstream commercial strategy.

In using the risk assessment and impact matrix to assess the client’s indication-sequencing strategy, we analyzed tradeoffs of developing later-line therapies targeting high unmet medical needs with various launch timelines and potential negotiation scenarios. Then, given IRA-imposed dynamics on the competitive landscape for those products, we assessed how different launch timings would affect negotiation risk.

The client is using our IRA risk assessment and corresponding recommendations to revise its pipeline and access strategies for the 11 products analyzed.