Pioneer Institute Launches Tracker Showing Drug Price Controls Are Raising Out-of-Pocket Costs for Medicare Patients

Business Wire

09-05-2025

BOSTON--(BUSINESS WIRE)--A new data tool from Pioneer Institute reveals that federal drug price controls—intended to reduce out-of-pocket costs for seniors—are instead making many prescription drugs more expensive for Medicare beneficiaries.
Its first analysis shows that among nine commonly prescribed medications which were subject to price setting by the IRA —used to treat conditions like heart failure, diabetes, and blood clotting—seven saw an increase in patient out-of-pocket costs.
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The IRA Medicare Drug Access Tracker, developed by Dr. William Smith and Dr. Robert Popovian, monitors the impact of the Inflation Reduction Act's (IRA) drug pricing provisions. Its first analysis shows that among nine commonly prescribed medications which were subject to price setting by the IRA —used to treat conditions like heart failure, diabetes, and blood clotting— seven saw an increase in patient out-of-pocket costs. (The insulin product was not studied since its price was fixed in statute under a separate IRA provision.)
'The price controls show that Congress fundamentally doesn't understand the rebate system that underpins the pharmaceutical market,' said Dr. William Smith, who built the Tracker with Dr. Robert Popovian. 'All the politicians who argued that the IRA law would make drugs more affordable should look at this new data.'
Under the current system, drug manufacturers pay substantial rebates to pharmacy benefit managers (PBMs) such as Caremark and Optum. These rebates help offset costs but are invisible to patients. When CMS seeks to control prices by lowering a drug's official 'list price,' as it does with the anti-coagulant Eliquis —bringing the price down from $521 to $231—rebates disappear, likely eliminating hundreds of millions in rebate payments from manufacturers to PBMs. PBMs appear to be compensating for that loss by raising co-pays, co-insurance, and transferring other charges directly to patients.
The IRA Medicare Drug Access Tracker focuses on Medicare patients served by the four largest PBMs, which account for 87 percent of the market. The tool is designed to measure whether federal price controls actually improve affordability for seniors by tracking out-of-pocket costs over time. It also follows administrative burdens that PBMs may have imposed on these drugs, which may strain already short-staffed providers, such as requiring them to fill out additional paperwork to secure a prescription (prior authorization) or placing quantity limits on the medications. Such administrative burdens are often used in the industry to discourage demand (demand management).
Among the Tracker's key findings:
Average out-of-pocket costs for the nine drugs rose 32 percent, from $74.51 to $98.42
Seven of the nine drugs saw individual cost increases ranging from $10.56 to $316.81
One of the two medicines seeing no increase in out-of-pocket costs faced competition from biosimilars that only became available in 2025
'Higher out-of-pocket costs are unlikely to be the only unintended consequence of drug price controls,' Dr. Popovian said. 'The IRA also creates less incentive for pharmaceutical innovation and increases the possibility that some popular drugs may be excluded from health insurance formularies.'
This release marks the Tracker's first report. Pioneer Institute will publish additional data later this year, as more drugs fall under the Inflation Reduction Act's price-setting provisions.
The public can find the tool at https://pioneerinstitute.org/rxpricewatch/
Dr. William S. Smith is Senior Fellow & Director of Pioneer Life Sciences Initiative. Dr. Smith has 25 years of experience in government and in corporate roles. His career includes senior staff positions for the Republican House leadership on Capitol Hill, the White House Office of National Drug Control Policy, and the Massachusetts Governor's office where he served under Governors Weld and Cellucci. He spent ten years at Pfizer Inc as Vice President of Public Affairs and Policy where he was responsible for Pfizer's corporate strategies for the U.S. policy environment. He later served as a consultant to major pharmaceutical, biotechnology and medical device companies. Dr. Smith earned his PhD in political science with distinction at The Catholic University of America.
Dr. Robert Popovian is the Founder of the strategic consulting firm Conquest Advisors. He also serves as Chief Science Policy Officer at the Global Healthy Living Foundation, Senior Healthy Policy Fellow at the Progressive Policy Institute, and Visiting Health Policy Fellow at the Pioneer Institute. He previously served as Vice President, U.S. Government Relations at Pfizer.
One of the country's foremost experts on every significant facet of biopharmaceuticals and the healthcare industry, he is a recognized authority on health economics, policy, government relations, medical affairs, and strategic planning. To learn more about Dr. Popovian please click here.
About Pioneer Institute
Pioneer empowers Americans with choices and opportunities to live freely and thrive. Working with state policymakers, we use expert research, educational initiatives, legal action and coalition-building to advance human potential in four critical areas: K-12 Education, Health, Economic Opportunity, and American Civic Values.
Please see below the first group of drugs subject that Pioneer is studying.
Eliquis
Enbrel
Entresto
Farxiga
Imbruvica
Januvia
Jardiance
Stelara
Xarelto