Inflation Reduction Act saves patients with cancer thousands in out-of-pocket spending

Key takeaways:

• Mean out-of-pocket costs dropped markedly in 2024 among Part D beneficiaries prescribed oral cancer drugs.
• Savings will likely grow as the out-of-pocket cap decreases to $2,000 in 2025, researchers said.

The Inflation Reduction Act’s cap on out-of-pocket spending saved patients with cancer more than $7,000 a year on oral chemotherapy medications, a research letter analysis published in JAMA Network Open showed.

According to Benjamin Pockros, MD, MBA, a urology resident at Michigan Medicine, and colleagues, high out-of-pocket costs are tied to lower rates of adherence, greater rates of hospitalization and mortality.

“People with cancer are already vulnerable to financial distress and medical debt,” Pockros said in a press release. “Our analysis suggests that legislative policy can have a big impact on the cost of cancer care.”

The Inflation Reduction Act, enacted in 2022, established a cap on out-of-pocket spending on prescription drugs by Medicare Part D beneficiaries at $3,500 in 2024 and $2,000 in 2025, according to the researchers.

They explained that understanding the impact of out-of-pocket spending on Part D medications is “paramount” as policymakers consider strategies to reduce drug spending.

“Evaluating changes to patient spending before and after the law can help quantify and contextualize policy outcomes,” they wrote.

In the analysis, Pockros and colleagues used the online Medicare Part D Plan Finder tool to estimate out-of-pocket costs for cancer medications in 2023 — when no cap was in effect — and 2024.

The study included the top 10 orally administered brand-name cancer drugs according to Part D spending in 2020 based on Part D plans available in a single zip code in Michigan.

The results showed mean annual out-of-pocket costs for Part D beneficiaries prescribed oral cancer medications in 2023 of $11,284.03 compared with $3,926.59 in 2024.

Meanwhile, researchers reported median cost savings on annual drug spending from 2023 to 2024 for Part D beneficiaries prescribed oral cancer medications of $7,260.12 a year.

“These savings will likely continue to grow as the [out-of-pocket] cap decreases from about $3,500 in 2024 to $2,000 in 2025,” Pockros and colleagues wrote.

They added that a $2,000 out-of-pocket cap would have resulted in savings for 1.5 million patients insured by Medicare Part D in 2021.

Researchers identified several study limitations. The analysis “may not be precisely representative of other areas” because it was limited to a single zip code, the researchers wrote.

Additionally, the study used estimated costs and may have been different from actual costs because of factors like pharmacy distribution.

Ultimately, the results “[are] especially critical as lawmakers now consider extending an [out-of-pocket] cap to commercial insurance,” Pockros said in the release.

References:

• New law regulating out-of-pocket drug spending saves cancer patients more than $7,000 a year, study finds. Available at: https://www.michiganmedicine.org/health-lab/new-law-regulating-out-pocket-drug-spending-saves-cancer-patients-more-7000-year. Published Sept. 10, 2024. Accessed Sept. 10, 2024.
• Pockros B, et al. JAMA Netw Open. 2024;doi:10.1001/jamanetworkopen.2024.32456.