Author(s):
The Inflation Reduction Act of 2022 (IRA) contained several provisions aimed at reducing prescription drug prices and costs for patients while lowering prescription drug spending under the federal Medicare program.1 While the $2000 annual out-of-pocket cap on Medicare Part D spending brings immediate financial relief to cancer patients, the Medicare Drug Price Negotiation Program may substantially reduce reimbursement for oncology practices beginning in 2028. The Association of Cancer Care Centers (ACCC) continues to monitor implementation and supports legislation to preserve provider reimbursement under Medicare Part B and ensure continued access to quality cancer care.
Medicare Part D Benefit Redesign With Annual Out-of-Pocket Cap
This IRA component is designed to benefit patients by reducing their out-of-pocket costs. Implementation was spread over 2 years. January 2024 saw an interim cap of approximately $3500 for brand-name drugs; in January 2025 annual out-of-pockets costs were capped at $2000 annually. This cap is especially beneficial for patients with cancer who require high-cost oral medications. For example, prior to the IRA, Medicare beneficiaries without low-income subsidies faced average annual out-of-pocket costs of $6200 for Revlimid® (lenalidomide) (used by 33,000 beneficiaries) and $5700 for Imbruvica® (ibrutinib) (used by 21,000 beneficiaries).2 The IRA also allows patients to amortize their costs by spreading the $2000 out-of-pocket amount across the entire year, improving predictability and financial planning.
Provider Impact: Medicare Drug Price Negotiation Program
The IRA also made changes to the Medicare Drug Price Negotiation Program, impacting providers. Specifically, the Centers for Medicare & Medicaid Services (CMS) completed the first round of negotiations for 10 Part D drugs with the highest Medicare spending, including 1 oncology medication. Four additional oncology drugs were included in the second round of negotiations among the 15 selected drugs. Negotiated prices will go into effect on January 1, 2026, for the first round of drugs. Drugs become eligible for negotiation 9 years (small-molecule drugs) or 13 years (biologics) after FDA approval.
Beginning in 2028, CMS will implement negotiated prices for physician-administered drugs covered under Medicare Part B, including many cancer therapies. For 2028, up to 15 drugs from Medicare Part D or Part B can be included in the negotiation program. From 2029 onward, up to 20 drugs annually from either or both programs can be selected.3
An Avalere analysis of 10 Part B drugs likely to be negotiated projects that physicians could lose at least $25 billion in add-on payments across both Medicare and commercial markets through 2032. Independent oncology practices administering just 4 oncology/hematology drugs from this list are projected to experience $12 billion to $19 billion in reimbursement reductions.4 These reductions could significantly impact the ability of oncology practices to:
Recommended Federal Legislative Action
ACCC strongly supports the Protecting Patient Access to Cancer and Complex Therapies Act5 (S.2764/H.R.5391 in the 118th Congress). This legislation seeks to:
Ensuring Sustainable Cancer Care Delivery
While the IRA’s out-of-pocket cap represents a significant improvement for Medicare beneficiaries with cancer, the potential reimbursement reductions for provider administered drugs could threaten the sustainability of community-based cancer care. ACCC urges policymakers to:
ACCC remains committed to advocating for policies that balance cost control with the need to maintain a robust cancer care delivery system that serves all patients.
References
1. Congressional Budget Office. How CBO estimated the budgetary impact of key prescription drug provisions in the 2022 Reconciliation Act. Published February 2023. Accessed February 25, 2025. https:// www.cbo.gov/system/files/2023-02/58850-IRA-DrugProvs.pdf
2. Cubanski J, Neuman T, Freed M. Explaining the prescription drug provisions in the Inflation Reduction Act. KFF. Published January 24, 2023. Accessed February 15, 2024. https://www.kff.org/ medicare/issue-brief/ explaining-the-prescription-drug-provisions-in-the-inflation-reduction-act/
3. Cubanski, J. FAQs about the Inflation Reduction Act’s Medicare Drug Price Negotiation Program. Kaiser Family Foundation. Published January 23, 2025. Accessed February 25, 2025. https://www.kff.org/ medicare/issue-brief/ faqs-about-the-inflation-reduction-acts-medicare-drug-price-negotiation-program/
4. Sullivan M, et al. Commercial spillover impact of Part B negotiations on physicians. Avalere. September 16, 2024. Accessed February 6, 2024. [Cited in Community Oncology Alliance (COA). COA prescription for health care reform: a policy blueprint for Congress, p. 28. February 2025.] https://www.avalere. com/insights/ commercial-spillover-impact-of-part-b-negotiations-on-physicians
5. Protecting Patient Access to Cancer and Complex Therapies Act, S.2764/H.R.5391, 118th Congress (2023-2024). Accessed February 10, 2025. https://www. congress.gov/bill/118th-congress/senate-bill/2764. https://www.congress.gov/bill/118th-congress/ house-bill/5391
