IRA Negotiated Drug Prices Can’t Come “On the Backs of Providers”

As subsequent rounds of drug price negotiations take place under the Inflation Reduction Act (IRA), the process will get more difficult and there are concerns that providers will potentially face a 49% reimbursement cut just in oncology drugs, said Nick Ferreyros, managing director, Community Oncology Alliance (COA).

Over the next years, COA plans to increase advocacy to ask that Congress fix the IRA to prevent unintended consequences that will hurt community oncologists, he said.

This transcript has been lightly edited.

Transcript

Although there is only 1 oncology drug on the IRA drug list, what is your takeaway from the negotiated prices and how this might impact oncology going forward?

The announcement of the negotiated prices for the Inflation Reduction Act, the first 10 drugs, we had this big headline of $6 billion saved. But then when you really sort of start to peel back the layers and the talking points, you start to realize [it’s] not quite as much as what everyone was saying; [they’re] sort of taking a lot of credit for more than they deserve. That doesn't mean that we can rest on that and say, “Oh, it's going to be a big nothing burger.” What it really means is that we have to start paying attention to what the next round is, because it's a very slippery slope.

These first rounds of negotiations sort of showed how it's going to play out, what we might be able to expect, but when the resounding impact of this first round is sort of like a “Huh? So, what?” You then have to wonder are they going to go more aggressively in future rounds? The first 10 were pretty easy to deal with. Next rounds, you start to get into a much, much different world, the different classes of drugs, and you start to be concerned that there's going to be more and more taken out of it.

Furthermore, on the provider side, which is what the Community Oncology Alliance is really concerned about, we've looked at the payer impact of the price setting, and there is potentially a 49% cut in provider reimbursement just in oncology drugs that we're going to see. That's only on the Medicare side, and so it'll cascade down into the commercial side as well, since a lot of the contracts are tied to it.

So, there is the potential that this continues to grow into a bigger and bigger burden. So, we have to keep our eye on the Inflation Reduction Act and how these negotiations play out.

How are community oncology practices feeling about future drugs being added to the list and negotiation process?

I think the IRA and drug price negotiations can have a really big impact on cancer practices because of the way we are paid on the ASP-plus system. And when you have the new Medicare prices being priced into that, we've done studies that are showing up to a 49% cut in provider reimbursement for the add-on payments there, which is just completely unsustainable for practices. And so, we're very concerned. Very, very concerned.

Part B [negotiations] will kick in in 2028, so we've got a few years of paying attention to how the process works in Part D and seeing how those negotiations play. And frankly, the message we're sending to Congress right now is that we need a technical fix to the IRA. The way it's being implemented could have a tremendous unintended consequence on independent community oncology practices.

So, we're going to be stepping up our advocacy over the next couple of years and asking that they take providers out of the middle of their negotiations and sort of make us whole in this process. Because if not, you're going to see a huge, huge impact on practices that, frankly, is not what Congress was intending. Congress is still going to get their negotiation, they're going to still get their lower drug prices for the taxpayers, but we shouldn't be doing that on the backs of providers.