Notably, overall U.S. spending on drugs dispensed by retail and mail pharmacies will remain about 9% of overall healthcare spending.
However, the new forecasts reflect the reality that the Congressional Budget Office (CBO) finally acknowledged last week: The Inflation Reduction Act’s (IRA) Part D provisions will cost much more than CBO had initially estimated.
Below, we outline the factors that led to the dramatic revision to Medicare spending, along with insights on the shrinking role of private insurance and consumer out-of-pocket spending.
Taxpayers—primarily via Medicare and Medicaid—now account for a majority of U.S. prescription drug spending, outstripping the share financed via employer-sponsored insurance.
Like it or not, everyone in the drug channel should prepare to deal with the government programs as increasingly important transaction partners—along with the biggest vertically integrated insurers, PBMs, specialty pharmacies, and healthcare services that administer these programs.