Inflation Reduction Act

A large life sciences manufacturer anticipated that some of its products may be selected for drug price negotiations under the Inflation Reduction Act (IRA). It sought to create an evidence strategy to articulate the value of its products during negotiations and thus needed to predict how CMS might weigh evidence and evaluate results. We helped the client anticipate CMS’s approach to evaluating evidence packages for products during the negotiation process, and develop strategies to strengthen those packages, to ensure that negotiated maximum fair prices (MFPs) accurately reflect the value of the client’s products.

We used claims data to model the likely impacts of the Inflation Reduction Act (IRA) Part D drug pricing reforms on pipeline and portfolio products for a large life sciences manufacturer. Our Excel-based interactive tool enabled the client to assess impacts of Part D benefit redesign and Medicare drug price negotiation by estimating changes to manufacturer discount liability and net revenue for target products. The tool incorporated plan liability shifts associated with IRA policies, modeled how plans may change formulary management in response to increased liability, and determined resulting adjustments in manufacturer discretionary rebates that may be necessary to maintain beneficiary access and product market share. The model also reflected IRA impacts on patient out-of-pocket (OOP) costs and estimated how the Part D OOP cap may affect drug utilization. This work will inform the client’s risk mitigation, payer contracting, and patient access strategies for the coming years.

We supported a scaled oncology provider group in educating prospective investors on its future performance by conducting a comprehensive assessment of the legislative and regulatory health policy environment affecting its market outlook. Specifically, we assessed the impacts of changes in that environment such as Inflation Reduction Act (IRA) reforms (e.g., likelihood of drug negotiations), 340B drug discount program changes and the impact changes may have on the provider landscape, and participation in the Center for Medicare & Medicaid Innovation’s (CMMI) Enhancing Oncology Model (EOM). Our research and analysis provided objective, third-party insights to prospective investors, who ultimately chose to make a material investment in the client.