Physicians could lose at least $25 billion in add-on payments for Part B drugs that could be part of the Inflation Reduction Act's program to negotiate drugs, according to a recent study by Avalere.
The study, funded by the Community Oncology Alliance, analyzes changes to reimbursements based on the IRA's Medicare Drug Negotiation Program. In August, CMS released the prices for the first 10 drugs that have been negotiated for Medicare Part D; they will go into effect Jan. 1, 2026.
Currently, Medicare reimburses physician-administered Part B drugs at the average sales price plus a 6% add-on payment, which is adjusted down to 4.3% by sequestration. Because of the way the IRA is operationalized, the add-on payment will now be based on the new maximum fair price negotiated by CMS, which will be lower than the average sales price as that is also tied to commercial market reimbursements.
Physicians who administer oncology or hematology drugs will be hit the hardest, according to the study, and are projected to see $12 billion to $19 billion in losses. Losses for immunology drugs are projected to be $9 billion to $11 billion, along with $2 billion to $3 billion for neurology drugs.
Additionally, immunology treatments are facing potential reductions of up to 74% in Medicare payments.
The total loss in add-on payments could reach as high as $37 billion under more aggressive negotiation scenarios, according to the study.
"The cuts to Medicare drug reimbursements under the IRA, if left unchecked, threaten to disrupt cancer care for millions of patients and increase costs across the health care system," Ted Okon, executive director of Community Oncology Alliance, said in a Sept. 16 news release. "Congress must act to stop the unintended consequence of the IRA with a technical fix that will preserve access to quality, affordable cancer care close to home."