What pharma companies need to know about the Inflation Reduction Act (IRA), with Emily Coriale, PharmD, LifeSci Consulting

Episode Summary

In this episode, host Nick Mazing from AlphaSense interviews Emily Coriale, Senior Principal Pricing & Market Access Lead at LifeSci Consulting. They discuss the far-reaching implications of the Inflation Reduction Act (IRA) on the US healthcare system, with a particular focus on drug pricing and price negotiations between the US federal government and pharmaceutical companies, as well as the impact on health plans.

Emily explains that the IRA is the most significant federal legislation in the last 20 years and highlights three main aspects of the act: drug price negotiation, prescription drug inflation rebates, and Medicare Part D redesign. These changes will not only impact profitability, investment, and strategic choices for health plans and manufacturers but also have a domino effect on the entire healthcare system, including patients, insurers, and private funding sources.

As the industry prepares for the IRA's implementation, Emily emphasizes the importance of understanding and mitigating risks, proactive stakeholder communication, and collaboration between healthcare sector partners. This episode provides a comprehensive overview of the IRA's potential impact on pharmaceutical companies and the healthcare value chain.

Guest-at-a-Glance

💡Name: Emily Coriale

💡What they do: Senior Principal Pricing & Market Access Lead

💡Company: LifeSci Consulting

💡Noteworthy: Emily is a PharmD 15+ years of healthcare leadership experience

💡Where to find them: LinkedIn

Key Insights

The Inflation Reduction Act's Three Main Components
 The Inflation Reduction Act (IRA) has three key components that are expected to impact the US healthcare system. First, drug price negotiation will allow the Centers for Medicare and Medicaid Services (CMS) to negotiate with drug manufacturers for high-spend drugs within the Medicare program, a first in the US. Second, prescription drug inflation rebates will require manufacturers to pay certain rebates for Medicare Part B and Part D drugs if drug price increases exceed the rate of inflation. Lastly, the Medicare Part D redesign will reduce the maximum out-of-pocket expenses for Medicare Part D beneficiaries, shifting financial exposure to manufacturers and health plans.

IRA's Ripple Effect on the Entire Healthcare Value Chain
 The Inflation Reduction Act (IRA) will not only impact Medicare but will also create a domino effect on the entire healthcare system. The reduction in out-of-pocket expenses for patients could influence investment in drug discovery and clinical development, affecting venture capital funds and public markets. The IRA's impact on drug negotiations and financial exposure could change the balance of technologies and disease states that are funded in the future.

Preparing for IRA Implementation – Manufacturers' Perspective
 As the Inflation Reduction Act (IRA) is set to begin its rollout in 2023, manufacturers must understand the impact on their existing portfolio and future investments. To mitigate risks and proactively develop strategies, manufacturers need to consider their position in the development phase and the implications for their investors. Open communication and collaboration between manufacturers and health plans will be vital to navigate the challenges presented by the IRA effectively.