The Reality Check on IRA Savings: A Conversation with Dr. Robert Popovian
- Mar 4
- 2 min read
We Work For Health's Executive Director Dan Leonard recently sat down with Dr. Robert Popovian, Chief Science Policy Officer at the Global Healthy Living Foundation and founder of Conquest Advisors, to discuss what's actually happening at the pharmacy counter now that the first Medicare-negotiated drug prices under the Inflation Reduction Act have taken effect.
Nearly two months into implementation, the picture emerging is far more complicated than the government's promises of billions in savings for seniors.
Dr. Popovian’s research at Pioneer Institute examined the first three quarters of 2024 compared to 2025 for the 25 drugs already subject to IRA price negotiations and found that while the government may save money through the IRA, whether individual seniors and patients actually benefit remains unclear.
Currently, all signals point to patients paying more out of pocket for their medications.
For example, despite a 63% list price reduction for one drug as a result of the IRA, out-of-pocket costs for seniors actually increased by 11% per prescription in the first three quarters of 2025 vs 2024.
The reason? PBMs – pharmacy benefit managers who manage drug benefits for Medicare Part D and Medicare Advantage plans – have numerous levers they can pull to maintain their margins, from increasing premiums to shifting costs onto other medications.
Patients are also paying more in annual premiums for their Medicare prescription drug plans.
For nearly two decades, Medicare Part D premiums remained remarkably stable, with increases below the inflation rate, but that changed dramatically with the IRA.
Now that the law’s 6% cap on premium increases is in effect, premiums are rising the maximum allowable 6% annually – a stark contrast to the 1-2% increases typically seen in prior years. It's a textbook example of economic behavior: when you set a cap, companies will run right up to it.
Dr. Popovian's core message to policymakers is that they must look at the IRA's effects dynamically. PBMs have numerous tools at their disposal: they can eliminate drugs from formularies, impose prior authorizations and step therapy to restrict access, make generics so expensive that patients pay cash instead of using insurance, and slowly increase average out-of-pocket costs without triggering the $2,000 cap set by the law.
"PBMs have many levers they can pull," he emphasized. “The question is whether CMS, Congress, and the administration are ready to monitor everything PBMs can do.”
If the past is any guide, that’s unlikely to be the case.
Watch the full conversation to hear more about the unintended consequences of the IRA and what policymakers must do to ensure patients, not just government coffers and PBM profit margins, actually benefit from these policies.