Originally published in Drug Channels as a guest post from Chris Dowd, ConnectiveRx SVP of Market Development.
Having recently anticipated and then weathered the fringes of back-to-back hurricanes, I worry about what may be barreling toward biopharma in 2025. For PSPs, we may be confronting a perfect storm driven by three primary forces: destructive effects of the Inflation Reduction Act (IRA), legal/regulatory battles over copay adjustment programs, and uncertainties following a national election.
Destructive Effects of the IRA
The IRA was intended to reduce costs and improve medication access for Medicare patients. But the law of unintended consequences may be playing out instead. One of the IRA’s most heralded provisions — drug price negotiation — may actually hurt the patients it was intended to help. New data from IQVIA suggests that “government price negotiations are unlikely to lead to consistent reductions in patient cost sharing, with many patients experiencing negligible savings or even potentially higher out-of-pocket costs.” Furthermore, in its newest reporting snapshot, Kaiser Family Foundation (KFF) discovered that, compared with 2024 counts, 2025 will see a 26% decrease in the number of prescription drug plans. Finally, to make matters even worse, a new national survey shows that >90% of independent pharmacists may refuse to stock the drugs on which Medicare is negotiating prices, fearing low and slow reimbursements from PBMs.
Alongside these patient-related problems, the IRA is already pressuring drug makers, with Medicare drug price negotiations leading the way. By 2025, the first wave of reduced prices will have taken effect, cutting profit margins that underpin manufacturers’ financial health. And the annual count moves to 20 Part D/B drugs in 2029 and beyond, meaning that by 2035 there could be 180 drugs in annual negotiations.
Inflation penalties add another layer of complexity. Manufacturers must carefully calibrate price increases against the risk of financial penalties. This delicate balancing act could constrict the funding pool allocated to patient support. Finally, the new $2000 cap on beneficiaries’ out-of-pocket spending is a welcome relief for patients but a disruptor for manufacturers. This cost shift compels manufacturers to rethink their patient support strategies.
The IRA's drug provisions are forcing manufacturers to get more nimble, innovative, and proactive in their management of PSPs.
Legal/Regulatory Battles Over Copay Adjustment Programs
Copay accumulator/maximizer programs continue to allow PBMs to profit from billions of dollars of manufacturer-provided copay assistance intended for patients. New research from the National Pharmaceutical Council (presented by Laura Duff at the 2024 Informa Connect Hub West conference) revealed that 42% of surveyed “jumbo” employers are using accumulators/maximizers, and another 8% may do so by 2026. And 12% are using or considering alternative funding programs.
Legal tussles over these programs seem endless. Let’s look first at the federal landscape, which was just rocked by a distressing announcement. When CMS published the proposed 2026 Notice of Benefit and Payment Parameters (NBPP) rule in early October, it did not include the promised requirement that copay assistance be counted as part of patient cost-sharing. Although it’s been a full year since a federal court struck down a rule that allowed insurers to decide whether copay assistance would count toward patients’ deductibles and OOP maximums, CMS punted. This postponement enables PBMs to continue to treat manufacturers’ copay support programs like their own private revenue stream.
At the state level, a mosaic of legislation is emerging. According to the state map from the All Copays Count Coalition, 23 states, Puerto Rico, and D.C. have passed legislation, 17 states have introduced bills, and 12 have taken no action. This fragmented landscape presents a significant challenge for manufacturers.
Until these programs are finally stricken from the landscape, they will continue to put downward pressure on manufacturers’ ability to provide robust patient affordability programs.
Uncertainties Following a National Election
The year following a national election is fraught with governmental uncertainty due to political polarization, policy uncertainty, and transition complexities. Besides the turmoil that comes with a new president and a “first 100 days” agenda, an estimated 25-30% of the members of major health-related congressional committees will be new, with steep learning curves. These realities create an environment of uncertainty that can hinder effective governance. Facing a $2 trillion annual budget deficit, spending cuts will be a high priority. And since Pharma is a favorite target for politicians, we expect significant action on drug pricing, reimbursement, coverage, and PBM reforms next year.
Industry stakeholders must remain vigilant and adaptable in navigating the turbulent political landscape to ensure that patient-centered initiatives are not lost amid post-election turmoil.
Patient Support Steps to Take Now
As we stand on the cusp of 2025, this "perfect storm" should trigger several steps that will guide manufacturers’ actions:
- Assess your entire portfolio and each brand, so you know your specific risks.
- Embrace your government affairs team, to stay on top of legislative/regulatory changes.
- Strengthen your relationships with patient advocacy groups, treating them as true partners.
With foresight and adaptability, the industry can weather this storm, emerging with patient support programs that are both resilient and responsive to the needs of those they serve.
To learn more about how brands can continue to offer robust patient support despite these challenges, register for a free online panel discussion on December 11 at 1:00 pm ET by clicking the banner below.