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The Inflation Reduction Act: One step closer to pharmacoequity?

President Biden’s signing of the Inflation Reduction Act on Tuesday marked a health care law that could have the greatest impact since President Obama signed the Affordable Care Act in 2010. There are many reasons to praise the act for what it will do for millions of older Americans.

One overlooked benefit may be its role in reducing health disparities, even though the term “health equity” is not mentioned once in the 750 pages of the Inflation Reduction Act, despite the Biden-Harris administration having made advancing equity and racial justice a policy priority. Addressing health equity is important given the persistence of the Covid-19 pandemic that has disproportionately affected racial and ethnic communities in the U.S.

A year ago, I introduced the term pharmacoequity in a First Opinion essay for STAT, and later explored it with two colleagues in the Journal of the American Medical Association. This term describes the goal of ensuring that every individual, regardless of race, ethnicity, and socioeconomic status, has access to the highest quality medications needed to manage their health care needs. While this has been an elusive goal for decades, especially in the U.S., the Inflation Reduction Act may actually help move the country closer to achieving it. Here are three ways it might help address pharmacoequity.

First, the act addresses the exorbitant cost of medications in the U.S. Americans spend up to $370 billion a year on prescription drugs. From antibiotics and cancer therapies to novel cardiovascular medications, these drugs help treat and prevent disease and prolong life for millions of Americans. For myriad reasons, Black and Hispanic Americans have higher rates of chronic diseases, and thus higher rates of prescription drug spending, than white Americans. They also have higher rates of not taking medicines as prescribed due to high drug costs.

The Inflation Reduction Act decreases medication costs in three ways: One is by setting a $2,000 annual cap on medications for Medicare beneficiaries enrolled in the Part D drug prescription benefit. This means that a patient with high blood pressure, diabetes, heart failure, and newly diagnosed cancer will not have to pay more than $2,000 a year, regardless of how many medications they need to take. A second way is by allowing the federal government to negotiate prices for brand-name drugs. A third is placing a $35 cap on insulin for Medicare Part D enrollees, a condition that disproportionately affects Black and Hispanic Americans.

These three cost-reduction measures will help millions of families, but especially those of racial and ethnic groups who bear the burden of pervasive income and wealth disparities in the U.S.

Second, the Inflation Reduction Act will help address pharmacoequity by expanding the eligibility guidelines for full benefits for Medicare Part D Low-Income Subsidies, which help people pay for their premiums, deductibles, and copayments. The act now provides full benefits coverage to Americans with incomes between 135% and 150% of the federal poverty level, a provision that will help many people in racial and ethnic communities. In 2018, the Kaiser Family Foundation reported that 72% of Black and 75% of Hispanic Medicare beneficiaries were enrolled in the Part D drug benefit, with 40% and 44%, respectively, enrolled in the Low-Income Subsidy program, compared to only 15% of white Medicare enrollees.

Third, the Inflation Reduction Act will provide a three-year extension (through 2025) for enhanced subsidies for individuals buying health coverage on the Affordable Care Act marketplaces. These subsidies, initially put into place through the American Rescue Plan Act, increase the amount of financial support provided to eligible individuals and expands subsidies to middle-income Americans. These subsidies matter because they allow individuals to maintain insurance coverage, a benefit that despite the successes of the Affordable Care Act, remains unavailable to more than 27 million individuals in the U.S. Two-thirds of those who are uninsured are Black and Hispanic, suggesting that these enhanced subsidies will greatly impact these communities.

Taken as a whole, the Inflation Reduction Act offers a significant opportunity to reduce health disparities, advance health equity, and bring the U.S. closer to the goal of pharmacoequity. As health care groups applaud the successes of the landmark bill on prescription drug costs, they must also push lawmakers to begin to address the fundamental and upstream causes of unequal access to prescription drugs in the U.S. Such bold policy changes will include patent reform, elimination of pharmacy deserts, and training a medical professional workforce that is without bias in its provision of clinical care.

The Inflation Reduction Act will be life-changing for millions of older and disabled Americans. If the federal government is willing to center health equity in the implementation of this bill, my hope is that the country will come closer to achieving pharmacoequity and improving access to lifesaving medications for all Americans.

Utibe R. Essien is a general internist and assistant professor of medicine at the University of Pittsburgh School of Medicine. The views expressed here are his alone and do not necessarily reflect those of his employer.