President Joe Biden's Inflation Reduction Act, passed one year ago Wednesday, holds several key provisions aimed at tackling the affordability crisis in medicine that have already begun to shape the future of the healthcare industry.

Four central elements of the 274-page law passed in 2022 address central areas of rising healthcare costs: Medicare drug pricing, insulin costs, vaccine coverage under Medicaid and the Children's Health Insurance Program, and Obamacare insurance subsidies.

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Although not all provisions of the law have taken effect yet, Democrats up and down the ticket are likely to use the healthcare provisions of the IRA as a talking point in the 2024 election cycle for its efforts to reduce healthcare costs for working families.

New polling data from the Campaign for Sustainable Rx Pricing reveal 69% of people are concerned about prescription drug prices and that a third of respondents had difficulty affording their medications in the past year.

Republican and Democratic pollsters conducting the bipartisan study for CSRxP noted that addressing prescription drug prices is "almost not a policy debate [but more of a] core value" for voters, likely influencing voter turnout as much as other pocketbook issues, such as gas prices and housing costs.

Here is a rundown of the main provisions of the IRA that have already and will continue to affect access to healthcare.

Medicare drug pricing

The largest part of the IRA's healthcare legislation is the establishment of the Drug Price Negotiation Program, which the Congressional Budget Office estimated will save Medicare $101.8 billion by 2031.

Under the program, the secretary of the Department of Health and Human Services is required to negotiate with drug companies to arrange a maximum fair price for certain brand-name medications without generic competitors under Medicare Part D, which provides coverage to self-administered medications for seniors.

HHS Secretary Xavier Becerra will announce the first 10 selected drugs for the first round of negotiations in September 2023, with the maximum fair price being set in September 2024 and going into effect on the market in 2026.

The program will eventually be expanded to include Medicare Part B, or hospital-administered medications.

Drug manufacturers that do not comply with the price-setting program could be subject to monetary and civil penalties and excise taxes of 65% to 95% of total drug sales revenue. Several pharmaceutical companies and medical system analysts have called the program a "bad policy" that will hinder research and development to influence innovation.

Both pharmaceutical giant Merck and advocacy group PhRMA have sued HHS over the provision, saying that the law compels participation in an unconstitutional price-fixing scheme through harsh penalties.

Quoting its lawsuit filing, Merck told the Washington Examiner that the program "involves no genuine negotiations and no voluntary agreements" but rather uses the threat of monetary force to discount prices, making the provision an example of "radical central planning."

PhRMA did not respond to the Washington Examiner's request for comment.

Insulin costs

As of January, monthly co-pays for insulin under Medicare Part D were capped at $35 and deductibles were reduced to zero. Starting last month, insulin deductibles under Medicare Part B were also eliminated if the drug was administered by durable or multiuse equipment instead of single-use or patient-specific mechanisms, such as insulin pens.

Private pharmaceutical companies also voluntarily began to lower insulin prices for all patients this year in response to the IRA.

Indianapolis's Eli Lilly was the first to announce price cuts for its insulin products on March 1. Two weeks later, competitor Novo Nordisk announced it would lower its prices to similar levels. The price cuts for both companies will take effect in 2024.

"While the current healthcare system provides access to insulin for most people with diabetes, it still does not provide affordable insulin for everyone, and that needs to change," Eli Lilly CEO David Ricks said.

The Centers for Medicare and Medicaid Services estimated in 2019 that 27.5% of Medicare fee-for-service patients were diabetic, and the Centers for Disease Control and Prevention estimated that 25% of the population over 65 has diabetes. The CBO approximated that the total cost of the insulin provisions for Medicare will cost $25.1 billion.

Vaccine coverage under Medicaid and CHIP

The IRA mandated as of January 2023 that Medicare Part D cover at no cost all vaccines recommended by the CDC's Advisory Committee on Immunization Practices, including the shingles vaccine.

The CBO estimated that the mandatory Part D coverage will cost $4.42 billion over the next 10 years.

An additional $2.5 billion in federal dollars will be spent in that time in equipping states to cover all vaccines recommended for adults by the Advisory Committee on Immunization Practices under Medicaid and CHIP, which covers both children and pregnant women. The Kaiser Family Foundation, a health policy organization, estimated that this program will affect at least 4 million people.

Obamacare insurance subsidies

The IRA also extended the Obamacare premium tax credit started under the American Rescue Plan, which as of now will expire in 2025.

Under the IRA extension, households earning over 400% above the federal poverty line who spend over 8.5% of their income on health insurance will be eligible for subsidies. Individuals and households under 150% of the federal poverty line are eligible for zero-premium coverage under Obamacare with the current subsidy schedule.

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The extension of Obamacare subsidies is the most costly single component of the healthcare provisions in the IRA, totaling nearly $33 billion over 10 years, per CBO estimates.

“It cannot be overstated just how impactful the enhanced financial support is for people buying healthcare in the marketplace, particularly at a time when pocketbooks are strained,” said Megan O'Reilly, AARP's vice president of government affairs for health and family, at the passage of the IRA.