How Drug Pricing Reform in U.S. 2022 Will Affect Health Economics and Outcomes Research (HEOR) arena.

The Inflation Relief Act, which includes drug price reform, was signed into law by President Biden on August 16, 2022. What will change in pricing and reimbursement, how it will affect business, and how collecting HEOR data can benefit pharma will be covered in this article.

Drug Pricing Reform in the U.S. 2022 – What exactly is Congress changing

According to research, drugs and medical services cost much more in America than in other countries. Taxpayers have long tried to get lawmakers to address this issue, but more often than not, their attempts have come to nothing. But several provisions in the Chuck Schumer and Joe Manchin Inflation Reduction Act address prescription drug pricing and health insurance.

What exactly will change:

First, the new law requires that for Medicare, prices for certain high-cost drugs be coordinated with the federal health secretary. This provision should guarantee transparent pricing and more reasonable price increases. It goes into effect in 2026 for 10 drugs that should have been on the market for several years. By 2029, the number of drugs involved in negotiations should increase to 20.

Also, starting in 2023, if drug cost increases are greater than the rate of inflation, pharmaceutical companies are required to pay rebates to Medicare and private insurance companies. This provision should significantly impact pricing, since pharmaceutical companies were raising their drug prices faster than inflation in 2020.

The bill also says that starting in 2025, people who participate in Medicare will not have to pay more than $2,000 a year in cash for prescription drugs.

How the new law will affect the biopharmaceutical industry

The potential effects of the Inflation Reduction Act coming into effect will be:

  1. Lower prices for prescription drugs should trigger lower prices for their over-the-counter counterparts.
  2. Increased negotiations by commercial entities with Medicare about reimbursements and potential rebates.
  3. Any price changes would require evidence-based reasoning.

Thus, the importance of health economics and outcomes research for a company to gain access to the drug market and determine the real cost of drugs is even greater.

How HEOR studies will benefit pharma

According to the new law, the subject of insurance negotiations will be drugs which have been on the market for several years and have proved to be effective medicines. Thus, the issue of cost-effectiveness studies, development of economic models, value assessment and other studies becomes relevant for them again. Usually, they are conducted when a drug is launched, but they are rarely updated after the market launch.

Once the law goes into effect, companies will have to regularly update comparative data and analysis with new drugs that have come to market in the past few years. Not only that, this data will have to be published and peer-reviewed in advance.

The consulting company Digital Health Outcomes is ready to cooperate with drug and medical device manufacturers. The company specializes in health economics and outcomes research, development of economic models and other digital tools that will provide a compelling evidence base for evaluating the value of your products. DHO’s research will also help with tasks such as:

  1. Determining the optimal starting price for new product development, taking into account competition, population levels and the value of the drug.
  2. Prioritizing launch indications.
  3. Developing a pricing strategy from launch to the end of the product’s commercial life cycle.

All data is provided in an easy-to-understand form and has rigorous scientific validity.


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