Inflation Reduction Act’s cap on insulin out-of-pocket costs boosts prescription fills

July 24, 2023

The Inflation Reduction Act $35 cap on out-of-pocket costs for insulin led to increases in the total number of filled insulin prescriptions for Medicare beneficiaries, according to a new study by researchers at the University of Wisconsin School of Medicine and Public Health and the University of Southern California Schaeffer Center for Health Policy & Economics.

Following the cap’s enactment in January 2023, the number of insulin fills among Medicare Part D enrollees increased from 519,588 to 523,564 per month. In contrast, insulin fills decreased among older adults not yet eligible for Medicare during the same period.

The study was published today in the Journal of the American Medical Association.

“Our analysis suggests that this policy meaningfully reduced the number of Medicare beneficiaries who were not filling their insulin because of the cost – which would have potentially put their health at risk,” said Rebecca Myerson, MPH, PhD, study lead author and assistant professor of population health sciences at the University of Wisconsin School of Medicine and Public Health.

To examine the cap’s effectiveness, researchers used data from IQVIA’s National Prescription Audit, which includes 92% of retail pharmacies and 70% of mail-order and long-term care facility pharmacies in the nation. The study sample included 14 million insulin fills.

Researchers compared changes in insulin fills for Medicare Part D enrollees aged 65 to 74 with changes among 60- to 64-year-olds without Medicare insurance. The study was designed using a well-established health policy research technique, difference in differences, that compares trends between one group exposed to a policy change and another that is not. Using this approach, health care outcomes can be compared in a way that allows researchers to remove background changes experienced by both groups.

The researchers compared outcomes before the Inflation Reduction Act took effect, from September through December 2022, and after, from January through April 2023.

The cap may have impacted segments of the population to different degrees, according to Dima Mazen Qato, study co-author, and Hygeia Centennial Chair and associate professor in the Titus Family Department of Clinical Pharmacy at the USC Mann School.

“Ensuring access to affordable insulin is critical for promoting health equity given that Black and Latinx individuals, including among Medicare populations, are more likely to suffer from diabetes and experience barriers in accessing diabetes medications, including insulins,” she said.

While insulin fills increased among Medicare Part D enrollees after the cap, the number of fills for those without Medicare dropped from 344,719 to 330,229 per month during the same period.

Additionally, the average number of monthly fills with out-of-pocket expenses less than or equal to $35 grew from 340,509 to 366,928 for Medicare enrollees. For those without Medicare, those less expensive fills fell from 242,733 to 220,867, the study found.

After adjusting for differences in the study sample, the analysis suggests that Medicare beneficiaries filled about 50,000 more insulin prescriptions per month that were below $35, and about 20,000 of these fills would not have taken place if not for the policy, said John A. Romley, study co-author, and associate professor at the USC Sol Price School of Public Policy and Alfred E. Mann School of Pharmacy.

“Many Americans are concerned with the cost of insulin because people with diabetes are at great risk of serious health problems, including nerve damage, heart attack and stroke,” he said. “This new policy has the potential to do two things: save money for people who are taking insulin, and help people afford insulin to begin with.”