On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022, which includes U.S. drug pricing reform that, among other things, requires the federal government to negotiate prices for some high-cost drugs covered under Medicare. In our recent webinar, Vice President of Value and Access Anna Forsythe discusses the effect that a strong HEOR strategy can have to help sponsors navigate this space for the benefit of all parties.

Determining which drugs will be subject to negotiation will depend on a list of fifty Part D and Part B high-spend single-source drugs, calculated based on two important components: the price of the drug and the number of patients receiving the drug. And it’s important to note that this reform is not considering newly launched drugs, but those that are already established and have been on the market for some time.

This may present some data-related challenges. As Dr. Forsythe mentions, despite, for example, the health economic data, models, comparative effectiveness, etc., being prepared prior to launch, seldom are these updated several years after the launch of a drug. Thus, this will reopen questions of value and price and the ability to negotiate and renegotiate them.

Therefore, it will be important to collect RWE data and update the comparative data via systematic literature reviews and run the analysis vs. new comparators that have come on the market since the drug was launched. Dr. Forsythe suggests that companies will need to start early in updating the data on these drugs and publish the findings in order to have the peer-reviewed publications needed for submission when this bill goes into effect in stages over the coming years.

For more information, read about our HEOR solutions.

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