Pioneer Study: Seniors Paid More for Key Drugs Despite Federal Price Controls

Out-of-pocket costs rose in 2025 for widely used Medicare drugs targeted under Inflation Reduction Act

BOSTON, MA, UNITED STATES, May 7, 2026 /EINPresswire.com/ -- Many Medicare seniors paid higher out-of-pocket costs in 2025 for widely used prescription drugs—despite a federal law intended to lower them, according to a new Pioneer Institute study.

The analysis examines the first group of drugs selected under the Inflation Reduction Act’s (IRA) price negotiation program. While federally set “Maximum Fair Prices” begin in 2026 and 2027, patients are already seeing changes in what they pay at the pharmacy counter.

“Policymakers assumed that lowering drug prices at the federal level would translate directly into lower costs for patients,” said Dr. William Smith, co-author of the study with Dr. Robert Popovian. “Our findings show that patients can pay more at the pharmacy counter depending on how plans and PBMs structure benefits.”

The study focuses on widely used therapies that will be subject to negotiated prices, including Eliquis (blood thinner used to prevent strokes and treat blood clots), Entresto (leading treatment for heart failure), and Ibrance (commonly prescribed breast cancer therapy).

Although insulin is also addressed under the IRA, it was excluded from the analysis. Congress separately capped insulin out-of-pocket costs, making it analytically distinct from the negotiated drug pricing provisions.

Most Medicare beneficiaries historically do not reach and therefore will not benefit from the IRA’s $2,000 annual OOP cap. In 2021, average annual OOP spending for non low-income subsidy beneficiaries was approximately $463, meaning the cap primarily benefits a smaller subset of high-cost patients rather than the typical senior.

At the same time, the analysis found that the volume of prescriptions for which beneficiaries paid no out-of-pocket costs also increased, reflecting changes in plan design rather than uniform price reduction.

These findings suggest that the IRA is already reshaping the Medicare drug market even before negotiated prices take effect. Changes observed in 2025 reflect shifts in incentives across the Medicare Part D program rather than the direct impact of government-set prices. These include the new $2,000 cap, redesigned benefit structure, and changing financial responsibilities for insurers and pharmacy benefit managers (PBMs).

Out-of-pocket costs also varied significantly across PBMs, reinforcing that formulary design, cost-sharing, and market behavior remain the primary drivers of what patients pay. As PBMs face lower revenue from negotiated medicines— due to lower retention of rebates, fees, and other concessions--and greater financial liability under the redesigned benefit, they may offset losses through increased cost-sharing, administrative restrictions, or more aggressive concession demands elsewhere in the market.

“These findings confirm that continued monitoring of formulary design, cost-sharing, utilization management, and the impact on innovation are essential as the IRA’s price setting and other provisions move into full implementation,” said report co-investigator Dr. Robert Popovian.

Drugs with declining out-of-pocket costs were often affected by independent market factors, including new generic or biosimilar competition or voluntary price reductions by manufacturers.

The Congressional Budget Office has also projected that the IRA’s drug pricing provisions could reduce incentives for developing new medicines, raising longer-term concerns about access and innovation.

Pioneer Institute will continue tracking out-of-pocket costs, formulary changes, and access restrictions as IRA price setting takes effect in 2026 and 2027. The Institute has developed fact sheets for patients and policymakers which are available at www.pioneerinstitute.org

Amie O'Hearn
Pioneer Institute
+1 617-680-5143
aohearn@pioneerinstitute.org
Visit us on social media:
LinkedIn
Facebook
X

Legal Disclaimer:

EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.