CMS IRA changes make robust evidence even more essential
Progressive manufacturers do need to think long and hard about their product and portfolio strategy. Many leaders are already creating plans to counter the financial impact of impending changes. And while life sciences leaders need to meet these new economic realities, now is not the time to pull back on RWD investments.
We recognize that CMS’ negotiation process hasn’t been fully laid out yet. But reviews of clinical and utilization data will almost certainly be part of the equation. If CMS draws on RWD to determine the high-cost drugs that will make the list, life sciences companies should be using RWD to help bolster their case for the value (not just the unit price) of a particular drug.
While strategies around leading indications and label expansions may have to change, now is not the time to scale back RWE programs. This evidence will be essential in grounding conversations with both government and commercial payers on value — for patients, providers and the health care system writ large. CMS may be setting the terms of those initial negotiations in 2026, but RWE gives you the opportunity to take greater control of the value narrative across the whole product lifecycle.
With the negotiation period beginning this year, we’re urging life sciences leaders to begin bolstering their value narratives now. While 10 drugs in 2023 doesn’t sound like much, there will be 80 total treatments eligible for negotiation in the program’s first 5 years. At some point soon, your team will be across the table from CMS. These efforts take months (or years) of planning and analysis, so waiting until your drug is selected for negotiation is too late.
Data may play a similar key role in conversations with health plans given the Part D benefit redesign and OOP cap. If plans turn to cost-control mechanisms (for example, prior authorization or step therapy) to inflect drug utilization, manufacturers will need strong evidence to counter the pressure and maintain formulary positions.
If a particular drug substantially improves quality of life or minimizes hospitalizations and readmissions, it’s imperative to uncover that in the data and bring it to plans — sooner rather than later. Life sciences companies should be prepared to defend their product’s positioning with analyses that demonstrate the real-world value of their drug.