OBJECTIVES: In 2022 the US government announced the Inflation Reduction Act (IRA), which included several provisions to lower Medicare patients’ prescription drug costs and reduce spending by the federal government. Starting in 2024, the IRA caps out-of-pocket spending for Medicare Part D enrollees by eliminating the 5% co-pay within the catastrophic threshold. Then, from 2025, the legislation adds a $2,000 hard cap on out-of-pocket spending, while mandating manufacturers to cover 20% of costs from catastrophic coverage.

In this study, our aim is to compare the cost of Humira and CT-P17, Celltrion’s adalimumab biosimilar, by estimating the amount that each stakeholder would spend in 2024 and 2025 versus in 2023.

METHODS: Costs levied to each stakeholder: the government, commercial payers, manufacturers, and beneficiaries were compared under the scheme of Medicare Part D standard eligibility group. WAC of CT-P17 was assumed to be 15% lower than the originator’s WAC.

RESULTS: Results showed that in 2024, patient out-of-pocket spending for Humira and CT-P17 would decrease 48% and 47% respectively, and even more in 2025 due to the $2,000 cap. Medicare spending would begin decreasing from 2024 but would then drop by nearly 75% in 2025. Commercial payers and manufacturers’ burden would grow slightly in 2024, and in 2025 they’d face nearly a three-fold increase on their drug spending. However, the introduction of CT-P17 may reduce Medicare’s burden by 17.36% in 2024 and 16.23% in 2025. For commercial payers, the expenditure may decrease by 13.90% in 2024 and 15.01% in 2025 as a result of using CT-P17 instead of the originator.

CONCLUSIONS: The implementation of the IRA is expected to reduce financial burden for patients and the federal government, while increasing commercial payers and manufacturers’ share. Adding a biosimilar would allow Medicare and commercial payers to reduce prescription drug expenditure and expand patient access to biological treatments.