Countervailing IRA Winds

Orphan rankings are also feeling the impact of the 2022 US Inflation Reduction Act. But the IRA winds aren’t all blowing in the same direction. Imbruvica’s demotion from the 2028 orphan sales top ten was due in part to its appearance on a different top ten: that of the highest-costing Medicare drugs, now facing price negotiations. This IRA provision exempts only single-indication orphans; Imbruvica’s dozen or so FDA approvals since 2013 span a range of B cell malignancies. AbbVie won’t know Imbruvica’s new price until September 2024 but has already taken a $2.1 billion impairment charge. Jakafi, on the other hand, may benefit from the IRA. This is thanks to a different part of the law: the $2,000 cap on out-of-pocket costs for Medicare Part D patients. Jakafi is used to treat rare blood disorder myelofibrosis, which mainly affects the elderly – including many of the over-65s eligible for US Medicare. The cap comes into force in 2025, and over 10% of Medicare Part D beneficiaries may be eligible, estimates US market access consultants ADVI. IRA could turbo-charge soon-generic Jakafi towards its $3 billion 2028 US sales target.Expect further IRA-driven shake-ups in 2024. Lawsuits will play out – courts already dismissed suits filed by industry lobby group PhRMA and AstraZeneca - and Medicare-negotiated prices for the first set of ten most costly drugs will be published on September 1. Forecasts are always uncertain; enduring macro-economic instability, war and a pending US election make them feel even more so.