Navigating the New IRA Landscape by Leveraging Real-World Evidence

By Peter Neumann
Director, Center for the Evaluation of Value and Risk in Health, Institute for Clinical Research and Health Policy Studies, Tufts Medical Center; Professor of Medicine at Tufts University School of Medicine

This blog post summarizes remarks given at Panalgo’s Data to Insights 2024 conference in Atlanta on May 9, 2024.

Although the impact of the Inflation Reduction Act (IRA) remains uncertain, the new provisions requiring Medicare to negotiate selected drug prices seem highly likely to increase the importance of real-world evidence (RWE).

Like it or not, the Centers for Medicare and Medicaid Services (CMS) is becoming a health technology assessment organization. Under the IRA, prices for drugs will not be negotiated until the therapies have been on the market for many years, so the accumulated RWE on these products will loom large in drug price negotiations.

Historical Emergence of RWE

RWE covers data from insurance claims, electronic medical records, patient-generated data from mobile devices, and other information. Its use has been growing steadily as reflected in regulatory policy.  As one example, the Food and Drug Administration (FDA) Modernization Act, enacted in 1997, allowed drug companies to promote their products to payers, not only based on randomized control trial evidence to payers, but also on “confident and reliable scientific evidence,” which opened the door to RWE. Congress recognized that RWE was important in communications about a drug’s value because it can complement the clinical trial evidence, shedding light on how a drug works in real world settings and on populations somewhat different than those studied in controlled studies.

In the 2016 21st Century Cures Act, Congress instructed the FDA to expand its use of RWE to support the drug approvals. Since then, the FDA issued several guidance documents on electronic medical records, registries, and data quality, and has been relying on RWE, albeit cautiously, in support of certain drug approvals or supplemental indications. In some cases, such as in the approval of the indication of breast cancer in men for the drug Ibrance (palbociclib), the FDA has also relied on RWE.

RWE’s Growing Role in IRA Drug Price Negotiations

Under the IRA, the availability and quality of RWE will be an important consideration in drug price negotiations. RWE can help support Medicare negotiations by identifying therapeutic alternatives, measuring key outcomes, examining specific patient populations treated by the drugs, addressing health equity, and highlighting unmet needs.

As one example, there are dozens of published studies using RWE to investigate the safety and long-term effectiveness of the two direct oral anticoagulants, Elliquis (apixaban) and Xarelto (rivaroxiban), selected for the first round of IRA negotiation. The RWE will be important because there are no head-to-head randomized controlled trials comparing these two drugs.  A challenge for CMS is that existing data tend to be on Medicare populations, and studies differ in terms of data sources, populations, time frames, and statistical methods. CMS has presumably been sifting through the studies, examining their strengths and limitations, and attempting to determine the drugs’ comparative effects on hospitalization, bleeding rates and adherence.

Going forward, CMS will need help in examining this uneven but important data. The IRA should provide a call to action to biopharma companies, who will look to harness RWE to help support their products. By embracing RWE, biopharma companies can better meet the demands of the IRA and contribute to a more evidence-based healthcare system.

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