Federal Drug Price Reforms Are Working, New BIDMC Study Finds
Medicare Beneficiaries Skipping Fewer Medications Due to Cost Since Drug Pricing Reforms
BOSTON — More than one in four American adults struggle to afford their prescription medications. Those who can't are left with grim choices — skipping doses, cutting pills in half, or abandoning prescriptions entirely — that can come with serious health consequences. New research from the Richard A. and Susan F. Smith Center for Outcomes Research at Beth Israel Deaconess Medical Center (BIDMC) offers early evidence that federal drug pricing reforms intended to help are beginning to do just that.
Published in JAMA Internal Medicine the study found that Medicare beneficiaries were less likely to report skipping, rationing, or foregoing medications due to cost after the IRA's prescription drug cost-cutting provisions took effect Jan. 1, 2024. The improvement was greatest among those managing multiple chronic conditions.
"For too long, Medicare patients have been forced to ration important medications because of cost. Our findings are an early signal that the Inflation Reduction Act is changing that – and the patients benefiting most are exactly those who need it most," said Rishi K. Wadhera, MD, MPP, MPhil, associate director and section head of health policy at the Smith Center for Outcomes Research at BIDMC and senior author of the study.
The IRA's 2024 provisions targeted two groups most burdened by drug costs. For Medicare beneficiaries with high medication spending, the law eliminated the five percent coinsurance requirement for catastrophic coverage, effectively capping annual out-of-pocket costs at approximately $3300 per year. For lower-income enrollees who had been receiving only partial assistance, it expanded access to full subsidies, significantly reducing what they pay for their medications.
To assess the real-world impact of these changes, researchers used a quasi-experimental difference-in-differences design, drawing on data from the National Health Interview Survey, an annual survey of more than 27,000 U.S. adults conducted by the Centers for Disease Control and Prevention. Wadhera and colleagues compared Medicare Part D beneficiaries between the ages of 62 and 67 to a similar group of privately insured adults who were not subject to the IRA's provisions.
They found that Medicare beneficiaries experienced a 4.9 percentage point reduction in cost-related medication nonadherence relative to their privately insured counterparts. Specifically, fewer patients reported skipping doses, reducing doses, delaying prescription fills, or foregoing medications because of cost. The finding held up across multiple sensitivity analyses, including after adjusting for race, ethnicity, income, and educational attainment, and when compared to a different comparison group (dually-enrolled beneficiaries).
The effect was particularly pronounced among beneficiaries managing two or more chronic conditions — including hypertension, diabetes, heart disease, and cancer — who saw a 7.8 percentage point reduction in cost-related nonadherence. Compare that to privately insured adults, not covered by the IRA's provisions, for whom medication nonadherence rose more than two percentage points during the same period. As of June 30, 2024, 1.5 million Medicare beneficiaries had saved close to $1 billion from the IRA's elimination of the catastrophic coverage coinsurance requirement alone.
"When someone with diabetes or heart disease stops taking their medications due to cost, the consequences can be severe. Our data suggest that the IRA’s reforms are helping the highest-risk patients stay on the medications they need," said Lucas Marinacci, MD, a faculty physician investigator at the Richard A. and Susan F. Smith Center for Outcomes Research and general cardiologist at BIDMC, and lead author of the study.
While the IRA's drug provisions are helping Medicare beneficiaries stay on their medications, they are not yet making a dent in their overall health care costs. The study found neither a corresponding improvement in Medicare beneficiaries' ability to pay medical bills nor a decrease in their anxiety about future health care costs.
Co-authors included Stephen Mein, MD, of the Richard A. and Susan F. Smith Center for Outcomes Research at BIDMC, and Benjamin N. Rome, MD, MPH, of Brigham and Women's Hospital.
This work was supported by the John S. LaDue Memorial Fellowship, the National Institutes of Health, the American Heart Association Established Investigator Award, and the Donaghue Foundation.
Marinacci reports personal fees from Echo IQ. Rome reports grants from Arnold Ventures, the Elevance Health Public Policy Institute, and Humana, and personal fees from Alosa Health. Wadhera reports personal fees from Abbott Cardiovascular and Chamber Cardio. The other authors declare no conflicts of interest.
About Beth Israel Deaconess Medical Center
Beth Israel Deaconess Medical Center is a leading academic medical center, where extraordinary care is supported by high-quality education and research. BIDMC is a teaching affiliate of Harvard Medical School, and consistently ranks as a national leader among independent hospitals in National Institutes of Health funding. BIDMC is the official hospital of the Boston Red Sox.
Beth Israel Deaconess Medical Center is a part of Beth Israel Lahey Health, a healthcare system that brings together academic medical centers and teaching hospitals, community and specialty hospitals, more than 4,700 physicians and 39,000 employees in a shared mission to expand access to great care and advance the science and practice of medicine through groundbreaking research and education.
