Drug Pricing

The Inflation Reduction Act (IRA) makes improvements to Medicare to increase accessibility and affordability of prescription drugs for Medicare enrollees, reduce the rate of growth in Medicare drug spending, and improve the financial sustainability of the Medicare program.

We report findings of a case study of Civica Rx, a U.S. nonprofit pharmaceutical company whose model is based on long-term hospital membership agreements with minimum volume commitments and buffer stock requirements.Related Products:

These Fact Sheets highlight health care cost savings achieved under the Inflation Reduction Act (IRA) and the Affordable Care Act (ACA) for each of the fifty states and the District of Columbia. Enrollee savings on Medicare Part D out-of-pocket costs, insulin, vaccines, and Marketplace premiums are presented.

The Inflation Reduction Act (IRA) is helping people with Medicare, including nearly 30 million women enrolled in Part D. Our review shows that, in 2020, about 733,000 women enrolled in Part D and B would have benefited from the IRA’s $35 insulin cap and, in 2021, about 2 million women would not have had any out-of-pocket costs for recommended adult vaccines covered by Part D.

In 2022, 43.3 million Medicare Part D enrollees (82 percent) filled 1.1 billion prescriptions for generic prescription drugs. While most enrollees filled at least one prescription for $2 or less, most (54 percent) paid more than $2 for at least one generic drug. Over 6 million enrollees filled at least one prescription for over $20.

The Inflation Reduction Act (IRA) is helping people with Medicare, including over 8 million Part D enrollees who reside in rural areas. This fact sheet outlines the potential impacts of the IRA’s key drug-related provisions for rural Medicare enrollees.

The Inflation Reduction Act’s (IRA) expanded financial assistance in Medicare’s Low-Income Subsidy (LIS) Program would have benefited nearly 461,000 Partial LIS enrollees had the provision been in effect in 2020. An additional 2.9 million Part D enrollees who were eligible but not enrolled in LIS would also have benefited from the program.

ASPE contracted with RAND Health Care to carry out three studies analyzing data on U.S. prescription drug prices and availability in comparison to drug prices and availability in other Organisation for Economic Co-operation and Development (OECD) countries. In 2022, U.S. prices across all drugs (brands and generics) were nearly 2.78 times as high as prices in the comparison countries. U.S.

The Inflation Reduction Act (IRA) includes provisions to increase accessibility and affordability of prescription drugs for the 65 million Medicare beneficiaries, reduce the rate of growth in Medicare drug spending, and improve the financial sustainability of the Medicare program. These IRA provisions include a rebate on certain Part B and D drug prices if prices rise faster than inflation.

The cornerstone of a well-functioning market is competition. President Biden’s Executive Order 14036, “Promoting Competition in the American Economy” identified a lack of competition as a key driver for problems across economic sectors.