Inflation Reduction Act 2022

Inflation Reduction Act 2022

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Last month, the Biden-Harris Administration took a new stance on healthcare costs rising exponentially across the US by signing the Inflation Reduction Act (IRA). IRA passage with provisions aiming to reduce out-of-pocket costs is truly the capstone achievement.

ID: Tr01 CATEGORY: Healthcare Services GEOGRAPHY: Global

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Inflation Reduction Act (IRA): Policy Overview and Benefits

President Joe Biden signed the Inflation Reduction Act (IRA) into law which aims to combat drug price increases and reduce overall healthcare costs for millions of Americans.

IRA Provisions & Key Takeaways

  • IRA enables Medicare to negotiate prices of prescription medicines with pharma companies, starting with 10 drugs covered in Medicare Part D in 2026. More drugs will be up for negotiation each year for a total of 60 drugs by 2029
  • Beginning in 2023, out-of-pocket insulin costs will be capped at $35 per month for Medicare beneficiaries. IRA also institutes a $2000 annual cap for beneficiaries’ part D spending, starting in 2025
  • From October, if the price of a Part D prescription drug is raised by more than the rate of general inflation, the drug manufacturer will have to give Medicare the amount of the increase above the inflation as rebates
  • Starting in 2026, bestseller Medicare drugs that have been on market for over a decade without generic or biosimilar competition will face a minimum discount of 25-60% that is subject to negotiation with HHS
  • The bill extends Affordable Care Act (ACA) subsidies that reduce monthly premiums to the beneficiaries for the next 3 years which was introduced back in 2021
  • Earlier, Medicare enrollees who choose branded drugs over generics had to spend $3,000 out-of-pocket to qualify for the catastrophic threshold and bear 5% coinsurance thereafter on prescribed drugs. IRA has eliminated that from 2024

Inflation Reduction Act (IRA): Implications on Various Stakeholders

The inflation Reduction Act (IRA) proposes a set of provisions with an overarching goal to reduce patients’ out-of-pocket costs; these newly-introduced prospects impact a set of stakeholders in different ways, from drug development to price point.

  • Negative Impact on Revenue

A combination of the new Medicare inflation rebates with existing price protections might result in certain price increases actually reducing the manufacturer’s net revenue after rebates for a given product.

  • Hike in Launch Prices

Drug manufacturers may retain one way to escape future inflation rebate liabilities and reduce the need for later price increases by setting up higher launch prices of new products, resulting in higher benchmark period prices.

  • Reduction in out-of-pocket costs

Certain provisions including an annual spending cap of $2,000, eliminated coinsurance under catastrophic coverage, and limited insulin cost at $35 per month, will reduce patients’ out-of-pocket costs for healthcare.

  • A shift in the investment landscape

The exclusion of small biotech companies from price negotiations would discourage the development of new drugs or reduce new venture capital investments in start-up pharmaceutical companies.

  • Cost Diversion Loophole

IRA has generated concerns that Medicare drug price negotiations could leave a loophole, allowing manufacturers to shift costs to consumers with private health insurance and employers as its impact is less clear in these areas.

1. Executive Summary
1.1 Service Overview
1.2 Global Scenario
1.3 Country Overview
1.4 Healthcare Scenario in Country
1.5 Healthcare Services Market in Country
1.6 Recent Developments in the Country

2. Market Size and Forecasting
2.1 Market Size (With Excel and Methodology)
2.2 Market Segmentation (Check all Segments in Segmentation Section)

3. Market Dynamics
3.1 Market Drivers
3.2 Market Restraints

4. Competitive Landscape
4.1 Major Market Share

4.2 Key Company Profile (Check all Companies in the Summary Section)

4.2.1 Company Overview Product Applications and Services Recent Developments Partnerships Ecosystem Financials (Based on Availability)

5. Reimbursement Scenario
5.1 Reimbursement Regulation
5.2 Reimbursement Process for Services
5.3 Reimbursement Process for Treatment

6. Methodology and Scope

Insights10 will provide you with the reports within 10 key parameters which are:

  1. Market Overview
  2. Market Growth Drivers & Restraints
  3. Epidemiology of Disease Type
  4. Market Segmentation
  5. Market Share
  6. Competitive Landscape
  7. Key Company Profiles
  8. Healthcare Policies & Regulatory Framework
  9. Reimbursement Scenario
  10. Factors Driving Future Growth

Based on our many years of experience, we believe that these are the parameters that are critical to decision-making for business stakeholders. Our focused approach to developing reports focused on 10 key parameters, enabled us to arrive at the name “Insights10”.


Stage I: Market Data Collection

Primary Interviews: We have developed a network of experts, freelancers, and researchers across countries through which we engage with local experts to gather key data points and assumptions about each market. We also engage regularly with some of the best market research agencies such as Atheneum, GuidePoint, GLG, etc. to conduct surveys and interviews, and build intelligence. We have language translators as a part of our team, who between them can cover 30+ languages allowing us to extract better local insights.

Secondary Data Collection: We have developed strong expertise and experience in secondary data collection methods for developing unique data sets and research material. We gather data from multiple reliable sources to maintain a high level of accuracy and consistency. The market data is analyzed and forecasted using appropriate statistical and coherent models. The report offers an overall analysis of the market size, growth, and market share as well as a segment-level analysis of the specific market. Our report includes precise, to-the-point information related to the overall market, competition, growth drivers, challenges, regulatory updates, and competition.

Data Sources: We have access to multiple highly reliable free and subscription data sources. We have many years of experience to understand which sources are more dependable for what and which to prefer for the reliable and latest information. The key sources of information include the following, but are not limited to:



Stage II: Market Data Analysis and Statistical Model

Market Trends: We generally look at macro parameters and micro indicators. The macro parameters include changes in government policies, demand and supply of the market, government intervention programs, and major market share. The micro indicators are GDP growth, market size, market volume, etc. We also understand nuances specific to each country like the US, Canada, India, Germany, etc., and have worked across 60+ countries and hence not only understand global trends but how these differ by country, how payment models, market structure, cultural parameters, etc. differ in each country.

Market Sizing and Analysis: Our expert data analytics team has created various market forecast models by employing the top-down approach i.e. starting with the large overall market and segmenting different areas and the bottom-up approach i.e. starting with population and epidemiology and rolling up based on spend, etc., estimating the size of the market, and distributing among the geographic and/or product segments.

The top-down approach is mainly used for new product forecasting and the bottom-up approach is used for demand estimation of any product for different countries summed up to form the total market. We are able to round off insights and build stronger forecasts because we always do both these methods and triangulate the final numbers.

The study on the market covers the analysis of the leading geographies such as Asia-Pacific, Africa, Europe, Middle East, North America, and  Latin America for the period of 2022 to 2030. The qualitative analysis covers the industry landscape and trends, market opportunities, competitive landscape, and policy and regulatory scenario, and the quantitative analysis covers different market estimates and forecasts.

Data Triangulation & Validation:

Data triangulation of various sources and results of the research are carried out by benchmarking with reliable sources such as industry statistics, statistical databases, and company-level averages, etc.

We make sure to finalize the numbers in alignment with the market research. Firstly, our internal experts ensure thorough validation and checking to ensure accurate and precise analysis and then validation is also done using a multiple-data analysis model. Two-level validation is done and entails the finalization of the report scope and the way of representation pattern.



Stage III: Interpretation and Presentation

Analysis & Interpretation: The information gathered is then analyzed and synthesized. The second series of interviews are done if necessary to check and validate. The future opportunities are analyzed by understanding product commercialization and many other factors. It also comprises the analysis of data discrepancies observed across various data sources. Information procured from secondary and primary results is then, interpreted by considering the following parameters: (a partial list)

  • Establishing market drivers and trends
  • Analyzing the regulatory landscape to understand future growth
  • Market Segment based analysis to obtain revenue/volume
  • ​Analyzing current needs and determining penetration to estimate the market

Insights: Our reports deliver actionable insights backed with supporting facts and figures to assist you in achieving exemplary growth. Our in-depth analyses are interspersed with relevant insights and statistics to offer an executive-level view of a given market. The description helps in correlating many minor factors affecting the market and their impact on the different segments within the market.

Data curated from the analysis and interpretation are drawn to portray all in one consolidated report.

Presentation & Reporting: The market research report is presented in different forms such as charts by using a scientific approach for easy understanding. Historic, current, and future analysis is provided for each market in terms of both value and volume. The size of the market is interpreted in the US Dollar value and the respective unit, based on the product, for volume consumption.

The foreign exchange rates are calculated on the respective dates and for the respective regions covered in the study.

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This report addresses

  • Intelligent insights to take informed business decisions
  • Qualitative, acute and result oriented market analysis
  • Market size and forecasts from 2022 to 2030
  • Opportunities for expansion and in-depth market analysis
  • Segmentation and regional revenue forecasts
  • Analysis of the market share and competitive landscape
  • Strategic Recommendations to chart future course of action
  • Comprehensive Market Research Report in PDF and PPT formats

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Last updated on: 13 December 2023
Updated by: Riya Doshi

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