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The IRA’s boost to generics

ARTICLE | Market Access

By decreasing Medicare’s contribution to branded Part D drugs, the act can make generic drugs cheaper for plans — even after manufacturer rebates

By Richard Guy, Biopharma Analyst

April 25, 2024 1:04 AM UTC

Changes in the Medicare Part D benefit structure will reduce, but not eliminate, health plan incentives to prefer high-priced brand drugs over generic competitors. Unlike the IRA price negotiations, which will affect 10 drugs in the first year, the IRA benefit restructuring affects all Part D sales.

Medicare Part D, which helps Medicare patients pay for drugs that they administer to themselves such as orals and certain injectables, has long been criticized for favoring high-cost drugs in part by allowing health plans to keep the lion’s share of the manufacturer rebates that accompany those drugs, and basing the amount of money it contributes on a drug’s price before any rebates have been applied. …