Emerging Trends in Part D Formulary Design Following Implementation of the IRA

The Inflation Reduction Act (IRA) of 2022 makes significant changes to the Medicare Part D prescription drug benefit intended to lower prescription drug costs for Part D enrollees. Key provisions include:

• Capping enrollee out-of-pocket drug spending at $2,000
• Requiring Part D plans and drug manufacturers to pay a greater share of costs for Part D enrollees, and
• Implementing a drug price negotiation program for high-spend drugs.

Stakeholders are understandably interested in assessing the extent to which the IRA will drive changes to formulary design. The multi-policy reforms associated with the IRA (e.g., redesign and drug price negotiation) make uncovering the root causes of these formulary dynamics challenging, as multiple provisions with overlapping goals are being implemented in tandem. To better understand this dynamic, we used publicly available Part D formulary and enrollment data to assess trends in cost sharing requirements and formulary placement from 2024–2025 of drugs in PDP and MA-PD plans. We then examined the same trends among the 10 drugs selected for negotiation for initial price applicability year (IPAY) 2026.

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