Medicare drug pricing reforms linked to improved medication adherence

More than one in four American adults struggle to afford their prescription medications, often forcing difficult choices such as skipping doses, splitting pills, or abandoning treatments altogether.

New research from the Richard A. and Susan F. Smith Center for Outcomes Research at Harvard-affiliated Beth Israel Deaconess Medical Center suggests that recent federal drug pricing reforms are beginning to ease that burden for Medicare beneficiaries.

Published in JAMA Internal Medicine, the study found that Medicare recipients were less likely to skip, ration, delay, or forgo medications because of cost after key prescription drug provisions of the Inflation Reduction Act took effect on Jan. 1, 2024.

Early signs of progress

The improvements were most significant among beneficiaries managing multiple chronic health conditions, a group that often faces the highest prescription drug costs.

“For too long, Medicare patients have been forced to ration important medications because of cost. Our findings are an early signal that the Inflation Reduction Act is changing that — and the patients benefiting most are exactly those who need it most,” said Rishi K. Wadhera, senior author of the study and associate director of health policy at the Smith Center for Outcomes Research.

The Inflation Reduction Act introduced several measures aimed at reducing prescription drug costs for Medicare beneficiaries.

For patients with high medication expenses, the law eliminated the 5 percent co-insurance requirement for catastrophic coverage, effectively limiting annual out-of-pocket drug costs to approximately $3,300. The legislation also expanded full prescription drug subsidies for eligible lower-income beneficiaries, significantly reducing medication expenses.

Examining the impact

To evaluate the effects of these policy changes, researchers analyzed data from the National Health Interview Survey, an annual survey conducted by the Centers for Disease Control and Prevention involving more than 27,000 U.S. adults.

The team compared Medicare Part D beneficiaries between the ages of 62 and 67 with a similar group of privately insured adults who were not affected by the Inflation Reduction Act’s prescription drug provisions.

Researchers found that Medicare beneficiaries experienced a 4.9 percentage point reduction in cost-related medication nonadherence compared with their privately insured counterparts.

Specifically, fewer beneficiaries reported:

  • Skipping medication doses.
  • Reducing prescribed doses.
  • Delaying prescription refills.
  • Forgoing medications because of cost.

The findings remained consistent after adjusting for factors such as race, ethnicity, income, and educational attainment.

Greatest benefits seen among patients with chronic diseases

The strongest improvements were observed among Medicare beneficiaries managing two or more chronic health conditions, including hypertension, diabetes, heart disease, and cancer.

This group experienced a 7.8 percentage point reduction in cost-related medication nonadherence following implementation of the law.

By comparison, medication nonadherence among privately insured adults increased by more than 2 percentage points during the same period.

Researchers noted that as of June 30, 2024, approximately 1.5 million Medicare beneficiaries had collectively saved nearly $1 billion due to the elimination of catastrophic coverage co-insurance requirements.

“When someone with diabetes or heart disease stops taking their medications due to cost, the consequences can be severe. Our data suggest that the reforms are helping the highest-risk patients stay on the medications they need,” said lead author Lucas Marinacci, a faculty physician investigator at the Smith Center for Outcomes Research and instructor at Harvard Medical School.

Financial concerns remain

While the study found encouraging improvements in medication adherence, the researchers noted that the reforms have not yet translated into broader reductions in overall health care financial burdens.

The analysis found no significant improvement in beneficiaries’ ability to pay medical bills and no measurable reduction in anxiety about future health care expenses.

Researchers say the findings highlight the positive impact of targeted prescription drug reforms while also underscoring the continued financial challenges many older Americans face when accessing health care.

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