Extending IRA Inflation Rebates to Commercial Plans Could Save Billions
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Mar 13, 2025
Extending inflation-based prescription drug rebates to all commercial health plans, rather than just applying them to the Medicare program, could potentially save as much as $8.1 billion annually, a recent Health Affairs study finds.
The Inflation Reduction Act (IRA) requires pharmaceutical manufacturers to pay rebates to Medicare if they raise prices faster than the rate of inflation for certain drugs. To gauge the effects of extending the program beyond Medicare, researchers analyzed 130 million claims — comprising 16,107 drugs — for 11 million enrollees in commercial plans in 2021. They found that if the IRA rebate program was applied to the entire commercially insured population, savings would be largely driven by a small number of drugs with high total spending.
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