How a lot cash will IRA save Medicare? A paper by Hernandez et al. (2023) goals to reply this query. The strategies they use are as follows:

For the ten medication seemingly topic to negotiation by Medicare in 2026 based mostly on 2020 gross spending and lack of exclusivity, we extracted 2020 knowledge from 5 sources: (1) internet gross sales from SSR Well being; (2) whole items offered in the US from IQVIA Nationwide Gross sales Perspective knowledge; (3) 2020 Half D claims from a 5% pattern of Medicare beneficiaries; (4) items and spending from the Facilities for Medicare and Medicaid Providers (CMS) spending dashboards; and (5) drug age from the US Meals and Drug Administration web site.

Primarily based on this method, the authors discover that:

The minimal low cost stipulated by the IRA exceeds 2020 rebates for less than 4 of the ten medication anticipated to be negotiated in 2026…These embody etanercept (Enbrel), which will likely be topic to at the very least a 60% low cost, up from an estimated rebate of 39.1%, and the most cancers medication ibrutinib (Imbruvica), palbociclib (Ibrance), and enzalutamide (Xtandi), all of which will likely be topic to a minimal low cost of 25%, up from estimated rebates of 9%, 5.7%, and 15.0%, respectively. Primarily based on 2020 gross spending, the minimal required low cost on these 4 medication mixed would generate financial savings of $1.8 billion

Why are solely 4 of 10 medication more likely to have decrease costs below IRA? The explanations is that deductions are already very excessive for six of the ten remaining medication of curiosity.

You’ll be able to learn the total paper right here.