Insight
5 Key Highlights from our Barrier Breaker Podcast Episode
Editor's Note: This Barrier Breaker podcast episode was recorded in April 2025. Any policy updates or developments that have occurred since the time of recording may not be reflected in this article.
The Inflation Reduction Act (IRA) is reshaping the healthcare industry with new price constraints and a redesigned Part D benefit. As the industry adapts, the focus remains on keeping patients at the center. Will this lead to more affordable medications for those who need them most?
Will more people be able to access and afford the medications they need to live healthier lives as the Inflation Reduction Act’s Drug Price Negotiation Program – or IRA – evolves? This is the central focus of today’s policy and drug pricing reform discussions and the main topic of the debut episode of CoverMyMeds’ Barrier Breaker podcast series.
In a candid discussion, John Beardsley, Senior Vice President of Corporate Strategy and Business Development at CoverMyMeds, Fauzea Hussain, Vice President of Public Policy at McKesson and Ramesh Srinivasan, Senior Vice President and Chief Strategy & Transformation Officer for U.S. Pharmaceutical, McKesson, offered real-time insights on the IRA and broader drug pricing reforms – what’s changing, what uncertainty still remains and how to prepare for the road ahead.
Change is happening. Key parts of the IRA “are already starting to impact stakeholders up and down the U.S. pharma value chain,” Srinivasan explained.
For one, inflationary rebates are active for Medicare, requiring manufacturers to pay back the difference if they raise prices faster than the rate of inflation. As a result, manufacturers face new constraints on price increases.
Another major shift is the Part D benefit redesign, which went live in January 2025. This brings immediate changes to who pays for what, when and how much with Medicare. Under the new structure, the federal government and patients are scaling back their share, while manufacturers and health plans are taking on more of the financial burden.
That trade-off may be manageable for some types of drugs, but less so for others.
“If you’re a manufacturer of branded medications in the primary care retail setting, you’re likely to see some benefits from this new program,” Srinivasan explained. “But if you are a specialty drug manufacturer, this is likely going to be a headwind from a financial and gross-to-net standpoint.”
Recent market signals underscore the differing impacts on manufacturers based on their portfolio mix.
“Just in the last few months, we’ve seen some very large pharma companies start to go public,” Srinivasan said. “This is going to cost them billions of dollars just in the first year, depending on their mix of branded versus specialty medications.”
While the IRA’s Drug Price Negotiation Program is in motion, many of its details are still evolving, and additional changes are on the horizon. Most recently, President Trump issued an executive order focused on reducing drug prices — “the first roadmap for the second term to understand his drug pricing priorities,” as Hussain described it.
The key imperatives, she noted, are lowering drug prices, increasing competition and improving transparency. Some of the proposals build on past efforts, including drug importation, but there are also new elements this time around, such as “adjusting hospital payment for drugs so that they better align with their actual acquisition cost,” Hussain explained. That includes reducing hospital outpatient department reimbursement and looking at site-of-service neutrality for the related drug administrations.
The order also calls on the Center for Medicare and Medicaid Innovation (CMMI) to test new drug pricing models.
“Many are surmising that that might include a most-favored nation or international pricing index model,” Hussain said. “Whether that’s a standalone or potentially an overlay into the drug negotiation program is yet to be seen.”
Zooming out, these reforms are prompting major shifts in how the U.S. pharmaceutical system operates.
“If you take a big step back, what all these provisions really start to signal is some very significant changes to the flow of data, and really the operational flows across many stakeholders in the U.S. value chain,” Srinivasan said. “Something we should all keep an eye on is really what happens to pharmacies, what happens to providers, and making sure that we are not, as a system, imposing more stress on an already stressed provider and pharmacy ecosystem.”
Independent pharmacies and community-based providers may feel the strain most acutely, Hussain said.
“The reality here is that the operational and financial challenges can be considerable, particularly for our independent pharmacists who may not be as well positioned as larger chains to absorb all of the new pressures — administrative, financial, the compliance burdens of these new programs.”
In this evolving environment, CoverMyMeds and McKesson are uniquely positioned to provide insight, Hussain added.
“The 360° view that we have across multiple stakeholders — and really almost every drug that gets commercialized in the U.S. — gives us a unique lens to understand and almost preempt some of the challenges that we might see.”
While the IRA’s Drug Price Negotiation Program is designed to contain costs, its success will be measured by patients’ abilities to access and pay for their medications.
Hussain emphasized that McKesson’s and CoverMyMeds’ patient-first policy mindset “allows us to engage our stakeholders in a more meaningful way to really focus in on making sure that any policy change truly benefits the patient and brings the savings that were promised, anticipated and greatly needed to address access and affordability concerns.”
This patient-centered approach guides the company’s collaborations across the healthcare ecosystem and informs how it works with manufacturers, pharmacies, providers and trade partners to support implementation — not just in principle, but in practice.
“Our advocacy efforts always begin with the patient in mind,” Hussain said. “If a policy doesn’t improve affordability, access or outcomes for real people, it’s not working. Our job is to help shape implementation so those promised benefits actually reach the people who need them most.”
The IRA marks a historic shift in drug pricing policy. But it’s also a test. Can the system adapt quickly enough to make the most of it?
“Healthcare has always been dynamic,” said Srinivasan, “But I’d argue that we live in very interesting times. And it feels even more dynamic than it has ever been before.”
Still, that sense of momentum creates space for collaboration and progress.
“When you’re in dynamic times, there’s also a great opportunity for change and disruption,” Hussain said. “That is particularly exciting to me — to have a group of thought leaders in a space to brainstorm and think about how we take advantage of this uncertainty and the unknowns.”
For a deeper dive into the IRA’s Drug Price Negotiation Program and medication access, check out the resources below: