Inflation Reduction Act Expected to Lower Medicare Part D Out-of-Pocket Costs for Specialty Drugs

A recent study published in JAMA Health Forum evaluates the projected impact of the Inflation Reduction Act (IRA) on out-of-pocket costs (OOP) for Medicare Part D beneficiaries using high-cost specialty drugs, specifically etanercept, ustekinumab, and ibrutinib. These medications are commonly prescribed for conditions such as rheumatoid arthritis, psoriasis, Crohn's disease, and certain cancers, representing significant financial burdens for patients. As part of the IRA's drug price negotiation provisions taking effect in 2026, the annual OOP costs for these drugs are expected to be capped at $2100, aiming to alleviate patient expenses while ensuring program sustainability.

The analysis compares estimated OOP costs for 2023 without negotiations and 2026 with negotiated drug prices. Findings indicate that while negotiated pricing alone contributes modestly to reducing OOP expenses, combined with the annual OOP maximum, it offers substantial financial relief to beneficiaries. The study emphasizes the role of early enrollment in the Medicare Prescription Payment Plan (MPPP), which helps spread costs evenly throughout the year, preventing high upfront payments at prescription initiation.

Specifically, beneficiaries not enrolled in the MPPP in 2026 could face elevated first-fill OOP costs—up to $2100 for ibrutinib—before reaching the annual maximum. The report highlights that specialty drugs constitute over 90% of total OOP costs for affected patients, underlining the importance of targeted negotiating strategies and enrollment incentives.

The IRA's implementation of negotiated prices is also expected to yield Medicare savings that offset the new cost-sharing caps, maintaining fiscal balance within the program. This dynamic illustrates how regulatory frameworks integrate cost containment with patient affordability, a critical consideration for payers and providers operating within Medicare Part D.

Overall, this study informs insurance stakeholders about the anticipated shifts in specialty drug pricing under the IRA, highlighting the ongoing need for strategic plan enrollment and patient education to optimize cost management. It underscores a regulatory environment increasingly focused on balancing drug affordability with system sustainability amid rising specialty medication expenditures.