Organizations such as the Association of American Medical Colleges (AAMC) have noted that nearly 20% of Americans have medical debt and that health care out-of-pocket (OOP) costs have doubled during the past 20 years. Additionally, these increases have disproportionately impacted Black and Hispanic individuals as well as families with low incomes. Families with middle-class incomes have also been impacted, feeling increased burdens of cost sharing via higher copays and coinsurance rates.1 Further, as reported in JAMA,2 a 2022 survey of adults 65 years and older found that 20.2% reported cost-related medication nonadherence during the past year. Nearly 5% of respondents reported assuming debt, and more than 8% would forego basic needs (eg, food or heat) to afford prescriptions.

Examples such as these have prompted health equity researchers to urge for the prioritization of initiatives to promote pharmacoequity, defined as “equity in access to pharmacotherapies or ensuring that all patients, regardless of race and ethnicity, socioeconomic status, or availability of resources, have access to the highest quality of pharmacotherapy required to manage their health conditions.”3 It is therefore unsurprising that patient advocacy groups such as Protect Our Care have lauded the impact of the Inflation Reduction Act (IRA), citing access benefits including4

  • Insulin copay caps ($35/month) in 2023 for more than 3 million persons with diabetes who are covered by Medicare
  • The Medicare Drug Price Negotiation Program, anticipated to lower prices for a select number of high-price drugs used to treat conditions disproportionately impacting women, and individuals living in communities of color and in rural areas
  • Record numbers of Americans enrolled in health plans in the Affordable Care Act (ACA) marketplaces, with the IRA contributing to lower premiums
  • An annual OOP spending cap of $2000 on medications, effective 2025

KFF5 cites other examples of individuals likely to benefit from the IRA, including Medicare Part D beneficiaries living with multiple sclerosis or cancer and taking drugs with high OOP costs. And a JACC article6 estimates that more than 1 million older adults with cardiovascular risks and/or disease spend more than $2000 annually on OOP prescription medications and will potentially benefit from the IRA cap.

Evolving Toward Equity

Implementation of the IRA is evolving, as is its impact. Below are 2 of the yet-to-be-resolved issues pertinent to how payers will respond to the IRA, potentially presenting further social obstacles and exacerbation of health disparities or, alternatively, presenting opportunities for payers and life science companies to proactively address adverse social determinants of health (SDOH) and health disparities:

  • First Issue:  A Precision survey7 of payers found that, because of the IRA, nearly half (44%) anticipated that they would increase their utilization management strategies in more sensitive categories. However, if prior authorization (PA) requirements expand, this will create additional access barriers for beneficiaries. Particularly impacted will be those with low health literacy, adding to their navigational obstacles to therapies and resulting in further erosion of trust between beneficiaries and their health plan. Moreover, expanded PAs will place additional strain upon providers serving under-resourced populations, potentially leading to denials and delays in care, nonadherence, and associated exacerbation of poor and disparate outcomes.8
  • The issue of utilization management (UM) methods, including PA processes, and their impact on health equity among Medicare Advantage (MA) beneficiaries is of concern to CMS. In a November 15, 2023, Proposed Rule,9 CMS proposed requirements that UM committees annually conduct a health equity analysis, examining 8 metrics (eg, denial rates, appeal overturn rates, and determination turnaround times) and their impact on beneficiaries with social risk factors as indicated by Low-Income Subsidy (LIS) status, dual eligibility (Medicare and Medicaid), and/or disability, compared to beneficiaries without those risk factors.8 In their Final Rule issued in April 2024, CMS indicated they are finalizing their requirements for the composition of the UM committee and for analysis by the UM committee. MA plans will be expected to publicly disclose, on their websites, the results of the UM committee’s analysis.10
    •  Payers have an opportunity to promote health equity by voluntarily and proactively conducting such analyses and taking action to avoid exacerbation of health disparities due to excessively restrictive and/or inequitable practices.
    • Life science companies have an opportunity to reinforce messaging to payers and policymakers about the adverse impacts of PAs on access to therapies, leading to nonadherence, poorer outcomes, and health disparities. They have opportunities to provide patients and providers with support for navigating the PA process, facilitating access to therapies, and promoting pharmacoequity.
  • Second Issue: The same Precision survey7 of payers also found that, because of the IRA, nearly half (44%) anticipated that they would increase their use of intervention programs to prevent costly disease progression. A 2023 Bain survey11 of insurance consumers found that turbulence and uncertainty are driving them to seek solutions to prevent and manage problems. They want their insurers to provide digital solutions supported by competent, caring professionals to solve their more complicated problems.
  • These factors, within a context of an aging population with complex conditions, are contributing to expanding demand for care management solutions, particularly for individuals with complex conditions and those at “rising risk.”12,13
    • Payers have an opportunity to leverage personalized care management solutions to engage patients and their support systems to facilitate access to care and therapies. They have opportunities to screen and intervene with SDOH care barriers and close patient health disparity gaps. These interventions can potentially build trust between patients and payers, facilitate medication adherence, reduce disease trajectories, and total cost of care, and enhance performance on the HEDIS quality measure Social Need Screening and Intervention.14
    • Life science companies have an opportunity to support payers with care management and SDOH resources. Examples include information on health disparities within therapeutic areas; training and best practices in screening for SDOH risks; tools to leverage electronic health records for identification of patients with adverse SDOH; assessments of health equity impacts of innovations; use of behavioral methodologies (eg, psychographic messaging, motivational interviewing, shared decision-making) for personalized patient engagement; multistakeholder websites to advance understanding of health equity and SDOH impacts among patients, providers, and quality/population health specialists; and consensus-building white papers and capacity-building initiatives to forge multistakeholder SDOH collaborations.



The IRA will drive payers to find ways to shift costs, such as expecting manufacturers to align around health equity initiatives to close disparities and better manage total costs of care. A 2023 Precision survey15 of payers and health systems found that 90% of respondents presently have, are planning, or are willing to consider SDOH collaborations with manufacturers. The same percentage were potentially willing to engage on real-world evidence (RWE) demonstration projects, suggesting openness to collaborative assessment of health equity impacts of therapies. With health care and pharmaceutical industries viewed negatively by an estimated 40% to 60% of Americans,16 significant opportunities exist to collaborate on trust building and inclusive customer/patient engagement initiatives to promote pharmacoequity for better adherence, outcomes, and total cost of care management.


  1. Grover A, Orgera K. The Inflation Reduction Act will cut health care costs for some patients. But we need to do more. AAMC. August 17, 2022. Accessed March 21, 2024.
  2. Dusetzina SB, Besaw RJ, Whitmore CC, et al. Cost-related medication nonadherence and desire for medication cost information among adults aged 65 years and older in the US in 2022. JAMA Netw Open. 2023;6(5):e2314211.
  3. Chalasani R, Krishnamurthy S, Suda KJ, Newman TV, Delaney SW, Essien UR. Pursuing pharmacoequity: determinants, drivers, and pathways to progress. J Health Polit Policy Law. 2022;47(6):709-729.
  4. Health care accomplishments tracker. Protect Our Care Education Fund. January 2021. Accessed March 21, 2024.
  5. Cubanski J, Neuman T, Freed M, Damico A. How will the prescription drug provisions in the Inflation Reduction Act affect Medicare beneficiaries? KFF. January 24, 2023. Accessed March 21, 2024.
  6. Narasimmaraj P, Oseran A, Tale A, et al. Out-of-pocket drug costs for Medicare beneficiaries with cardiovascular risk factors under the Inflation Reduction Act. J Am Coll Cardiol. 2023;81(15):1491-1501.
  7. Precision Medicine Group. IRA Survey, 2023. Proprietary data on file.
  8. Medicare Advantage, Part D, and more: proposed rule outlines significant policy and technical changes for CY 2025. Epstein, Becker, Green. December 12, 2023. Accessed March 21, 2024.
  9. US Department of Health and Human Services, Centers for Medicare & Medicaid Services. Medicare Program; Contract Year 2025 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly; Health Information Technology Standards and Implementation Specifications. 45 CFR Part I70. November 15, 2023.
  10. US Department of Health and Human Services, Centers for Medicare & Medicaid Services. Medicare Program; Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Program for Contract Year 2024—Remaining Provisions and Contract Year 2025 Policy and Technical Changes to the Medicare Advantage Program Medicare Prescription Drug Benefit Program, Medicare Cost Plus Program, and Programs of All-Inclusive Care for the Elderly (PACE). 42 CFR Parts 417, 422, 423, 460. Published online April 4, 2024. Accessed April 9, 2024.
  11. Naujoks H, Schwedel A, Brettel T. Customer behavior and loyalty in insurance: Global Edition 2023. Bain & Company. February 16, 2023. Accessed March 21, 2024.
  12. Data Bridge Market Research. Care management solutions market to observe prominent growth of USD 33.74 billion by 2030, size, share, trends, demand, growth and competitive analysis. Globe Newswire. April 13, 2023. Accessed March 21, 2024.
  13. Ewald B, Golden R. The role of care management in a changing healthcare system. Generations J. Spring 2021. Accessed March 21, 2024.
  14. Reynolds A. Social need: new HEDIS measure uses electronic data to look at screening, intervention. NCQA blog. November 2, 2022. Accessed March 21, 2024.
  15. Population Health Survey, 2023. Proprietary data on file.
  16. Business and industry sector ratings. Gallup News. Accessed March 21, 2024.