[co-authors: Haley Jeppson, Angela Zheng]
Key points:
- Access to medicines in Medicare is reduced as the IRA is implemented
- Fewer drugs are covered on Medicare Part D formularies in 2025 relative to 2024
- Medicines for serious conditions with high unmet needs are being removed from formularies and face a high degree of prior authorization
With appreciation for feedback from Mark Fendrick, Director of the Value-Based Insurance Design (V-BID) Center at the University of Michigan, and Daneen Sekoni, Vice President of Policy and Advocacy at the Cancer Support Community
This is part of an ongoing analysis of Part D plan formularies in Medicare Part D, monitoring access as the Inflation Reduction Act (IRA) is implemented (update on prior analysis, methods in endnotes).
The IRA changed the way drugs are covered and reimbursed in Medicare, and more restrictive formularies in drug plans are anticipated as a result.[1]
Findings from DLA Piper’s latest assessment on Part D formulary access suggest that Medicare beneficiaries may face challenges in obtaining their necessary medications.
To prevent the loss of affordable access to medicines, policymakers may consider taking steps to mitigate the IRA’s financial incentives that can result in higher costs for beneficiaries or restricted access to treatment.
This could include changes to the oversight of Medicare Part D formularies, and more specifically, consideration of where patient care may be disrupted. Additional changes could potentially be made to the IRA in implementation to preserve affordable access to medicine.
Background
The IRA includes financial incentives that can limit Medicare beneficiaries’ access to medicines. Under the IRA, plans cover more of the highest-need beneficiaries’ costs when they get treatment; there is a limit on Part D beneficiary out-of-pocket costs and a lower federal subsidy for Medicare drug plans to cover the medication expenses of higher-cost beneficiaries.
In addition, the federal government is setting the price for several drugs, likely supplanting the arrangements between drug manufacturers and health plans that resulted in discounts on drug prices for preferred formulary placement.
In combination, the increase in the plan’s financial liability creates an incentive to manage costs, which can be done by restricting access to medicines or charging the beneficiary more. Moreover, there is market pressure on Part D plans to keep costs, and therefore premiums, low to attract beneficiaries.
When a drug is on the formulary, a beneficiary typically pays an amount out-of-pocket and may also need to obtain approval, or prior authorization, from their health plan and physician. If a drug is not on formulary or a prior authorization is not approved by the health plan, the beneficiary may have to pay the drug’s entire cost, seek patient assistance, or forgo treatment.
Moreover, if a drug is not on formulary, the beneficiary's out-of-pocket costs do not count toward the cap if they do pay on their own. Restricting formulary reduces plan drug costs and premiums, but can also have other effects on beneficiary health or future costs of care if the plan ends up limiting access to needed treatment.
Our approach to the assessment
DLA Piper utilized freely available data from the Centers for Medicare and Medicaid Services (CMS) to evaluate Medicare formularies for a selection of medications that account for roughly half of Part D drug spending (in 2022) to determine if there was a change in formulary coverage in 2025. We included the 25 drugs that have been selected for federal price setting in the Medicare Drug Price Negotiation Program (MDNP). We found fewer drugs are available on formulary in 2025 compared to last year.
In particular, drugs for serious medical needs, such as drugs for neurological, respiratory, and immunological diseases, as well as drugs for diabetes, are being taken off the Part D formularies. There is a high degree of utilization management for those drugs in a protected class that are required to be on formulary (with limited exceptions explained in endnotes). This indicates that while the IRA may be saving the federal government money, Medicare beneficiaries with high health needs have restricted, and often less, access to treatment.[2]
Policymakers may consider taking corrective action to limit this decline in access and ensure that Medicare beneficiaries who use treatment can continue to benefit from Part D. This may include greater formulary oversight or investigation of drug management practices that limit access to care. Should the IRA lead to more restrictive formulary management practices – as many have predicted – and as we are seeing, corrective action by policymakers and the Trump Administration may be warranted.
Methodology
We evaluated Medicare Part D formulary access for a selection of drugs in March 2025. We compared the Part D formulary access in March 2025 to that in 2024. Our evaluation encompasses drugs from a range of therapeutic classes, each with varying costs to Medicare and beneficiaries. Our analysis includes the 25 drugs selected for MDNP in 2026 and 2027. Data was sourced from the publicly available CMS plan files and formulary files (methodology, description of plans, and drug selection in endnotes).[3][4][5][6][7][8]
Key findings from the formulary access assessment
We found that in March 2025, the analyzed drugs:
- Were covered on formulary 89 percent of the time, with nearly a 4-percent decline in on-formulary placement in the last year; and
- Had prior authorization required 40 percent of the time, with less than a 1-percent change relative to 2024.[9]
Table 1: Part D coverage of the frequently used drugs in our analysis
- Medicines with the least formulary access in 2025 and the largest decline relative to 2024 include treatments in the central nervous system (CNS), respiratory, immunology, and blood glucose regulator therapeutic areas[10]
-
- CNS treatment includes medicines for conditions including multiple sclerosis and Huntington’s disease
- Respiratory treatment includes medicines for cystic fibrosis, pulmonary hypertension, and chronic obstructive pulmonary disease
- Immunology treatment includes medicines for arthritis, immune system deficiency, Crohn’s disease, psoriasis, and colitis
- Blood glucose regulators – the class with the most drugs selected for MDNP in this analysis – include medicines for diabetes[11]
- CNS therapies and blood glucose regulators had the biggest declines in access without prior authorization
- Antineoplastics, which are cancer medicines, had the lowest rate of formulary access without prior authorization in 2025, but little change in prior authorization relative to last year
- Antivirals – which include medicines for HIV – where there is a prohibition on prior authorization, saw no change in formulary access or prior authorization
- There is a high formulary coverage for blood products, which include anticoagulants and medication to prevent strokes, and no loss of formulary access
Table 2: Part D coverage in 2025 by therapeutic area,[12] *=protected class
Conclusion
Drugs for serious conditions are losing formulary access in the Medicare Part D drug benefit, including CNS, immunology, respiratory, and diabetes, and often require more prior authorization.
Drugs in our analysis have historically been on formulary because they are in a protected class and have a high degree of prior authorization, when allowed. This suggests that beneficiaries may face challenges in obtaining their necessary medications.
We do not consider cost sharing in this analysis, but our prior analysis showed that co-pays are also increasing in 2025.[13]
As the IRA takes effect, policymakers and administrators at CMS may want to consider closely monitoring the evolution of formularies – including evaluating patient care disruption – and taking action to preserve beneficiary access and health.
[1] https://www.milliman.com/en/insight/financial-implications-ira-formulary-strategies-part-d, https://avalere.com/insights/how-may-the-ira-shift-part-d-market-dynamics, "Keeping watch on Medicare: Access prescription drug plans and premiums," and https://www.valueinhealthjournal.com/article/S1098-3015(23)02818-8/fulltext.
[2] There are six categories of drugs that are considered “protected classes” in Medicare, meaning plans need to cover all or substantially all medicines in that category on their formularies; but they may use utilization management, with the exception of antiviral drugs to treat HIV where utilization management is prohibited. Six protected classes in Medicare include antidepressants, antipsychotics, anticonvulsants; immunosuppressants for treatment of transplant rejection, antiretrovirals, and antineoplastics: https://www.cms.gov/newsroom/fact-sheets/medicare-advantage-and-part-d-drug-pricing-final-rule-cms-4180-f.
[3] Our analysis included an evaluation of PDP and MA-PD formularies, we excluded special needs plans (SNPs) and evaluated formulary for 30-days' supply only, we removed plans with suppressed data. The analysis is weighted by plan enrollment.
[4] We identified the top 100 Medicare Part D drugs by total cost in 2020 using the Centers for Medicare and Medicaid Services (CMS) Part D prescription drug data file. 2020 is the baseline year for our initial drug selection because it was a year prior to the implementation of the Senior Savings model that made certain changes to the Medicare Part D benefit structure. https://www.cms.gov/priorities/innovation/innovation-models/part-d-savings-model.We removed any drug that was a generic or had an available generic equivalent by the end of 2024.This was done by first eliminating any drug that had prescription data from of a generic equivalent in the Medicare Part D prescription drug data file, or was a generic, then by reviewing the US Food and Drug Administration (FDA) orange book for the remaining selected drugs that did not have a generic equivalent by 2022 in the Medicare drug event data. When a generic drug was noted as approved in the FDA orange book, we also confirmed that it had marketing authorization by the FDA and removed it when that occurred. Branded drugs with generic competition are typically removed from preferred formulary placement as a beneficiary can access a generic equivalent on a low-cost tier typically. See First Generic Drug Approvals.
This resulted in 57 drugs, these drugs accounted for 47 percent of all drug spending in 2022, the most recent year of CMS Part D spending data. They are in a range of therapeutic classes and with a range of costs. The list of drugs by generic names of selected drugs abacavir/dolutegravir/lamivudi, acalabrutinib, adalimumab, apalutamide, apixaban, apremilast, bictegrav/emtricit/tenofovala, canagliflozin, cariprazinehcl, dapagliflozinpropanediol, deutetrabenazine , dolutegravirsodium, dulaglutide, dupilumab, elexacaftor/tezacaftor/ivacaft, elviteg/cob/emtri/tenofalafen , empagliflozin, emtricitabine/tenofovalafenam, enzalutamide, etanercept, exenatidemicrospheres, fluticasone/umeclidin/vilanter, fluticasone/vilanterol, ibrutinib, immunglobg(igg)/pro/iga0-50, immunglobg(igg)/pro/iga0-50, insulinaspart, insulindegludec, interferonbeta-1a, linaclotide, linagliptin, liraglutide, macitentan, mirabegron, nintedanibesylate, osimertinibmesylate, palbociclib, pomalidomide, rifaximin, riociguat, rivaroxaban, ruxolitinibphosphate, sacubitril/valsartan, secukinumab, selexipag, semaglutide, semaglutide, sitagliptinphos/metforminhcl, sitagliptinphosphate, ticagrelor, tofacitinibcitrate, umeclidiniumbrm/vilanteroltr, umeclidiniumbromide, ustekinumab, valbenazinetosylate, varicella-zosterge/as01b/pf, and venetoclax.
[5] We collected all unique Concept Unique Identifier (RXCUI) codes, which is a system for uniquely identifying drugs, to then identify all unique National Drug Codes (NDC) codes. The NDC codes were then used to identify whether a drug is covered on a given formulary (using the plan information data and basic drugs formulary data). Useful explanation provided by NIH and Duke University, accessed: https://dcricollab.dcri.duke.edu/sites/NIHKR/KR/Using%20the%20RxNorm%20System.pdf, NDC Data.
[6] When a drug is “on formulary,” that means it is covered within the plan’s benefit and expenses for that drug count toward deductibles and other out of pocket limits. “Prior authorization” means an additional approval by the plan provider is required to receive the drug that is prescribed by the health provider. Explanation see https://www.medicare.gov/publications/11109-Medicare-Drug-Coverage-Guide.pdf.
[7] We matched these drugs to the formulary file with National Drug Code (NDC) codes identified through Prescription Drug Data Collection Code (RxDC).
[8] We used the USP Medicare Model Guidelines 9.0 to identify the therapeutic class for each drug.
[9] Step therapy occurred in less than one percent of formularies with minimal change in 2025 relative to 2024 and is not listed in the table.
[10] Antineoplastics, medicines for cancer, that are in a protected class, were covered on all formularies but almost entirely with prior authorization; and the antivirals in our assessment (all in a protected class as HIV treatments) had 100 percent formulary coverage and the lowest prior authorization (0 percent), as expected due to additional protections for HIV treatments in the Medicare benefit.
[11] In the drugs we selected, the categories with the highest average Medicare Part D drug cost per beneficiary were antineoplastic, respiratory, antineoplastic, immunology and CNS (in that order). Blood glucose regulators had the second lowest rate of spending per beneficiary. Based on the average cost per beneficiary in 2022, Medicare Part D drug event data CMS averages for these selected drugs.
[12] Count of drugs in each therapeutic class (N=) and number of drugs in that class selected for Medicare Drug Price Negotiation (MDNP=): Anti-neoplastics (N=9/MDNP=5), Antivirals (N=5/MDNP=0), Blood glucose regulators (N=13/MDNP=8), Blood Products (N=3/MDNP=2), CNS (N=3/MDNP=1), Immunology (N=9/MDNP=2) Respiratory (N=8/MDNP=2). We did not list the therapeutic categories separately where there were three or fewer drugs in our assessment.
[13] "Medicare Drug Price Negotiation: Saving money for Medicare, but what about patients?".
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