HKS Affiliated Authors

Ethel Zimmerman Wiener Professor of Public Policy, HKS; Henry and Allison McCance Professor of Business Administration, HBS


September 20, 2023, Paper: "The debate around prescription drug measures in the recently passed U.S. Inflation Reduction Act (IRA), which limit some patients’ out-of-pocket costs, has not fully addressed their effect on physicians and patients via their effect on payers. Reducing patients’ costs for prescription drugs under Medicare Part D will improve their adherence, health, and financial security. However, payers use cost sharing to negotiate lower prices, and a payer that reduces cost sharing without increasing utilization management may not be able to keep premiums low enough to keep its business viable. Therefore, the IRA provisions will increase Part D payers’ reliance on other ways to manage drug costs, such as prior authorization and/or requirements to try less expensive drugs first. These methods impose paperwork burdens on physicians and may delay or change the care received by patients. The authors discuss these features of the IRA and outline priorities for leaders who aim to further value-based care more generally." Read Via Catalyst