IQVIA: Patients Unlikely to See Savings from Medicare’s Drug Price Negotiation

The impact of the Inflation Reduction Act’s drug price negotiations is likely to be more complex, and patients may not see the expected higher out-of-pocket savings, according to a new analysis from IQVIA Institute for Human Data Science that was commissioned by We Work For Health, a life-sciences focused policy organization.

Price negotiations are unlikely to lead to additional savings for patients because the 10 drugs chosen by the Centers for Medicare and Medicaid Services are already subject to aggressive negotiations and significant rebates, the report finds.

IQVIA suggests the out-of-pocket savings for beneficiaries from the IRA’s $2,000 cap for out-of-pocket costs and $35 a month cap for insulin products are more clear. But the financial benefits for patients for drug price negotiation will vary based on the cost sharing structure and benefit design of the plans they are enrolled in.

Dan Leonard

“The report underscores how complex insurance plan designs ultimately drive patient costs and how government price setting of medicines simply leads to changes in insurance behavior, not what a patient pays at the pharmacy counter,” Dan Leonard, executive director of We Work For Health, said in a press release.

In August 2024, CMS released the prices for the first 10 drugs that have been negotiated for Medicare Part D. The new prices will go into effect beginning Jan. 1, 2026. CMS is expected to publish the rationale with the evidence it used to come up with its pricing strategy in March 2025.

CMS indicated that it was able to get discounts that range from a 38% to 79% from list prices. CMS has said the negotiated prices represent a 22% lower net spending in aggregate compared with 2023. Officials said that if the new prices had been in effect last year, Medicare would have saved about $6 billion, or 22%, on the 10 drugs.

Related: Questions Remain about Whether Negotiated Drug Prices will Save Money

In the new IQVIA analysis, researchers estimated what patients will actually pay for the 10 Part D medicines chosen by the Centers for Medicare and Medicaid Services. IQVIA calculated how changes in Medicare coverage and other factors will impact patient out-of-pocket costs.

IQVIA’s analysis suggested that the $6 billion savings that CMS says is possible likely overstates the savings that will take place in 2026 for several reasons. One is that the CMS assumes that the volume of sales for the 10 negotiated drugs will be comparable to 2023. But the volume for three drugs (Enbrel, Stelara and Eliquis) may be reduced by 2026 because of biosimilars and generics, and rebates may be reduced. For several drugs, there already was a downward trend on pricing and comparison with savings at the 2023 price may not be an accurate.

The IQVIA analysis also finds that the impact of drug price negotiation on patients’ out-of-pocket spending could also be smaller than expected. About 40% of Medicare Part D patients who take the selected drugs already receive low-income subsidies and already have low fixed cost sharing. Two of the drugs (Enbrel and Januvia) have the highest proportion of beneficiaries who receive the low-income subsidy. (Eliquis and Xarelto have the highest proportion of standard eligible Medicare patients, the analysis found.)

“While a reduction in point-of-sale costs may help some patients, such as those with co-insurance or paying the full price in the deductible, for most others, the cost sharing is unlikely to improve,” the report said.