Lou DeLoureiro | VP, Analytics Consulting
Eve Jamali, MSc. | SVP, Managing Director, US Access Strategy & Analytics
There are currently several significant developments in the policy and legislative landscape that are influencing market access, one of which being the Inflation Reduction Act (IRA). The IRA is reshaping the Medicare Part D landscape in ways that will have lasting effects on pharmaceutical pricing, access, and contracting. For manufacturers, payers, and providers, these changes introduce new risks, new opportunities, and a need for more precise modeling.
To support teams in preparing for the 2027 formulary negotiations, Precision AQ has enhanced its DealView platform to incorporate the structural changes introduced by the Inflation Reduction Act (IRA). Below is our guidance outlining the implications of these changes, the stakeholders affected, and how DealView enables teams to navigate and respond with greater clarity and confidence.
The IRA introduces several major updates to Medicare Part D, including:
These changes are designed to improve patient affordability and adherence, but they also alter financial incentives and responsibilities across the system.
For Patients
Lower out-of-pocket costs are expected to improve adherence and increase treatment initiation, especially for high-cost therapies.
For Payers
Payers will take on a larger share of costs in the catastrophic phase, which may lead to tighter formulary controls, more aggressive utilization management, and a shift in rebate expectations.
For Manufacturers
Manufacturers will need to adjust pricing and contracting strategies to reflect new payer behaviors and the evolving financial dynamics. While the removal of the coverage gap rebate and the rise in catastrophic rebates introduce mixed financial implications, the potential for increased utilization presents a meaningful opportunity. By understanding the shifting landscape and proactively addressing potential obstacles, manufacturers can position themselves to capture the upside through greater patient access and expanded market reach.
Precision AQ’s DealView platform has been updated to model the impact of the IRA on net pricing, payer behavior, and contracting strategy. It helps teams answer questions such as:
1. Will my product have coverage even in the skinnier formularies?
As payers adapt to increased financial risk, they may reduce the number of drugs included on their formularies, prioritizing cost-effectiveness and clinical value. This heightened selectivity increases the risk of exclusion for certain products, especially those with higher price points, marginal differentiation, or limited real-world evidence of value. Manufacturers must proactively assess the likelihood of their products being retained or dropped and consider strategies such as evidence generation, health economic analyses, and flexible contracting to maximize the chances of maintaining coverage.
2. How will the IRA affect my Gross-to-Net (GtN) calculations?
DealView simulates how changes in liability, rebates, and patient behavior influence GtN under different scenarios. It helps identify where costs may rise or fall and how those shifts affect net revenue.
3. How will payers respond to increased financial exposure?
The platform incorporates probability-based modeling to estimate how payers might react, such as narrowing formularies or intensifying utilization management, based on their exposure to Medicare and PDP risk.
4. What scenarios should I be preparing for?
DealView allows teams to test a range of scenarios using inputs like Medicare exposure, negotiated drug status, and patient comorbidities. This helps anticipate how different market conditions could affect access and contracting.
5. Where should I adjust my contracting strategy?
The model provides account-specific recommendations, including where supplemental rebates or value-based contracts may be needed to maintain access or mitigate risk.
6. How might Medicare Part D Redesign changes spill over into commercial markets?
DealView helps identify potential cross-channel effects, such as increased cost-sharing or access restrictions in commercial plans due to Medicare Part D Redesign.
The Medicare Part D Redesign is not just a policy change. It is a structural shift that affects how drugs are priced, accessed, and reimbursed. For manufacturers, this means rethinking how to model risk, forecast revenue, and negotiate contracts.
DealView provides a framework for doing just that. By integrating Medicare Part D Redesign specific inputs and payer behavior modeling, it helps teams:
Want to see how DealView models Medicare Part D Redesign? Connect with our pricing and formulary experts at Precision AQ: