Researchers at the Washington, D.C.-based Duke-Margolis Center for Health Policy broke down how the law could impact drug prices in commercial health plans.
Here are three findings to note:
- As previously estimated by the Congressional Budget Office, manufacturers are likely to introduce new drugs at higher list prices. The Inflation Reduction Act limits drug manufacturers’ ability to increase drug prices higher than the rate of inflation over time.
- Manufacturers will be less likely to negotiate down prices with commercial payers. The law gives CMS the ability to set a maximum fair price for a given drug, based on prices in Medicare and commercial markets. Negotiating lower prices could lower the ceiling for the maximum fair price.
- Drug manufacturers will have an incentive to raise average market prices and rebates for commercial payers. This means commercial plan members who need expensive drugs will likely pay more out-of-pocket, the authors wrote, and lower commercial premium growth.
Read the full analysis here.