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IRA – Saving Money, or Playing Politics?

IRA’s drug negotiation choices seem to be much more about the 2024 election than Medicare cost savings in 2026.

By Duane Schulthess, John Lamattina, and Harry P. Bowen

September 13th, 2023

On Tuesday August 29th, the Biden Administration and the Centers for Medicare & Medicaid Services (CMS) announced the first 10 drugs to be selected as part of their signature legislation, the Inflation Reduction Act (IRA).

The linchpin of the IRA has been to lower total Medicare costs. The text of the IRA states clearly that the drugs to be chosen for negotiation are those, “… drugs with the highest total expenditures being ranked the highest.” This language is completely unambiguous; drugs with the greatest total expenditures for taxpayers are the ones to be negotiated.

The IRA also includes provisions that drugs soon to be subject to generic or biosimilar competition are excluded from negotiation. This is logical as once a drug loses its patent exclusivity its price falls rapidly.

Our firm, Vital Transformation (VT), has been at the center of the IRA debate for well over a year. Given the IRA’s clear objective to contain taxpayer costs, we conducted economic modeling which simulated the impact of 10 years of IRA negotiations on Medicare spending and biopharmaceutical company revenues.

Are CAR-T therapies living up to their hype? A study using real-world data in two cohorts to determine how well they are actually working in practice compared with bone marrow transplants

18th July 2019

With the increasing demands being placed on HTAs in Europe, a methodology allowing for a valid assessment of the clinical effectiveness and costs for indications targeting small patient populations and orphan conditions, such as ALL, at the time of a reimbursement decision is vital. This is particularly true when the costs of these interventions are significantly high, such as in the case of CAR-T, where costs exceed US$375 000. By extracting RWD from live hospital EHRs, we were able to demonstrate a novel methodology that allows us to move beyond the use of proxies for clinical effectiveness measures extrapolated from clinical trials to obtain an assessment of the long-term outcomes and total costs of new therapies, such as CAR-T, compared with the next-best legacy treatment option.

Azar’s Plan To Tie U.S. Drug Prices To Foreign Ones Will Impact Investments In R&D

Photographer: Al Drago/Bloomberg © 2019 BLOOMBERG FINANCE LP Publish date: June 21, 2019 By John LaMattina, Contributor for Forbes Azar claims that HHS can reduce spending on Medicare Part B drugs with little impact on biopharmaceutical R&D investment. Duane Schulthess, Managing Director at VitalTransformation, questioned Azar’s claim on this. As he delved into specific compounds on Azar’s list of 27, he found some startling data. One striking case is with Biogen’s Multiple Sclerosis drug, Tysabri.

Digital Citizen, Digital Patient: Estonia’s upcoming – first-ever – EU Presidency will put eHealth high on the agenda


An interview with Ain Aaviksoo, Deputy General Secretary on eServices and Innovation, Ministry of Social Affairs, Estonia.

A key aim of the Presidency is to promote Digital Europe. In eHealth the goal will be to highlight how digital technologies can contribute to the sustainability and resilience of healthcare systems.

Digital Citizen, Digital Patient: How EU-funded research can drive the digitisation of health systems in Europe


An interview with Peeter Ross, professor at Tallinn University of Technology

As a participant in eight different EU projects, Peeter Ross, professor at Tallinn University of Technology, can fairly be described as a veteran of European ehealth research.

Digital citizen, digital patient: EMIF is bringing the power of numbers to dementia research

An interview with Simon Lovestone, Professor of Translational Neuroscience at Oxford University, UKMaking data repositories visible and easy to access is transforming translational research in Alzheimer’s disease. “You can answer questions you couldn’t before,” says Simon Lovestone, academic lead of the programme

Digital citizen, digital patient: EMIF makes it as good to give as to receive

An Interview with Nigel Hughes, Scientific Director, Quantitative Sciences at Janssen Research and Development By removing barriers to data exchange, EMIF has provided potent demonstrations of the power of pooling resources in Alzheimer’s disease and metabolic disorders. These exemplars are incentivising data sharing, says Nigel Hughes

Digital citizen, digital patient: How Wearables Can Fill the Data Gaps in Orphan Drug Development

An interview with Elin Haf Davies, CEO and founder of aparito As if the small number of patients is not enough of a hurdle, snapshot and episodic collection methods can make it impossible to amass the data needed to convince regulators and reimbursement agencies that therapies for rare diseases are effective. Wearables can help, says Elin Haf Davies, founder and CEO of aparito.

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