[co-author: Haley Jeppson]
The Inflation Reduction Act (IRA) made changes to the way drugs are covered and reimbursed in Medicare. It has been anticipated that this could result in more restrictive formularies in drug plans or higher co-pays for beneficiaries.[1]
In this report, DLA Piper evaluates co-pays for a selection of medicines that treat diabetes, a common condition in Medicare beneficiaries. The assessment shows that co-pays have grown considerably in 2025 relative to 2024, reversing a trend of declining co-pays previously.
This increase in cost sharing for other diabetes treatments could indicate that the IRA is not having its intended effect, which was to make drugs more affordable for people with diabetes, including a cost-sharing cap on insulin.
Co-pay assessment findings
Of the 25 drugs selected for the Medicare Drug Price Negotiation Program (MDNP) in the IRA, 7 are blood glucose regulators, making this the most commonly selected class of medicines. In this assessment, our team evaluated the growth in co-pays for these drugs in standalone Part D Prescription Drug Plans (PDPs) and in integrated Medicare Advantage (MA-PD) drug plans. We examined these plan types separately as it is anticipated that PDPs are more challenged to manage the cost and impact of the IRA relative to MA-PDs.[2]
DLA Piper found that over the past year, co-pays for the seven selected diabetes medicines have increased by $2 to $4 on average across all Part D plans, but increased $20 to $24 in PDPs, and decreased by $8 to $10 in MA-PDs. Moreover, from 2021 to 2024, the co-pays for these drugs had been decreasing.
The effect of the relative changes in co-pay in PDP and MA-PD has a disproportionate impact across the US. One of our previous assessments showed that MA-PDs are less available in more rural parts of the US relative to PDPs.[3] Therefore, a person living in a rural area may not have a choice of a plan with an affordable co-pay. As such, policymakers may want to consider greater oversight of Medicare Part D formularies and modifications to the IRA to prevent the loss of affordable access to diabetes medications as the IRA is implemented.
Background
The IRA directs the federal government to set the price for a selection of medicines in Medicare Part D and, to date, 25 drugs have been selected for the MDNP. The “negotiated” prices will take effect for these medicines in 2026 and 2027.
The law directs the government to select the drugs with the highest total cost to the Medicare program, which means that medicines to treat common conditions such as diabetes are likely to be selected. When the negotiated prices take effect, the government and plans will pay less for the selected medicines; however, beneficiaries will not necessarily see a cost reduction.
There are two types of cost sharing in Medicare Part D: a co-pay and coinsurance. Co-pay is the most common form of cost sharing for blood glucose regulator medicines. While the MDNP will reduce the price for federal government, it will not change the amount a Medicare beneficiary pays when there is a co-pay. The co-pay is set by the plan irrespective of a price change.[4] The co-pay for insulin was set not to exceed $35 by the IRA; this was implemented in 2023. However, other non-insulin treatments for diabetes were unaffected by that cap.
Methodology
Our team evaluated Medicare Part D formulary access for the seven selected blood glucose regulator drugs for diabetes.[5] We compared the Part D co-pays in May 2025 relative to 2024 and 2021.[6] We designated the therapeutic class of the drug based on the USP Medicare Model Guidelines 9.0. Data was sourced from the publicly available CMS plan files and formulary files (methodology in footnotes).[7][8][9]
Key findings from the co-pay assessment
- Considering the average across all part D plans, co-pays for selected blood glucose regulators have increased by $2 to $4 in 2025 relative to 2024. (Chart 1)
- However, examining by plan type (MA-PD and PDP) shows a distinction. Co-pays have increased in PDPs, but they have decreased in MA-PDs. (Chart 1)
- In PDPs, co-pays increased by $20 or more in 2025 relative to 2024 in PDPs.
- In MA-PDs, copays declined by $8 to $10 in 2025 relative to 2024.
- Co-pays had been decreasing from 2021 to 2024 in both PDP and MA-PD, prior to the announcement of the selected drugs.
- In 2025, co-pays are higher in PDPs relative to MA-PDs, where they had been lower in PDPs previously. (Chart 2)
- Co-pays are $13 to $14 higher in PDPs in 2025 relative to MA-PDs.
Conclusion
Our assessment found that co-pays are increasing considerably for blood glucose regulators selected for the MDNP in PDPs, but not in MA-PDs in 2025. Notably, co-pays for blood glucose regulators had been decreasing from 2021 to 2024.[10] Moreover, as co-pays were not affected when the government set the price with the MDNP, there is no reason to anticipate those co-pays will decline when the drug prices are set.
As there is far less access to MA-PD in rural areas of the US, our assessment indicates that people in rural areas are facing higher costs for the medicines for diabetes. Policymakers and administrators at CMS may consider closely monitoring the evolution of formularies as the IRA takes effect and consider taking action to preserve beneficiary access.
[1] https://www.milliman.com/en/insight/financial-implications-ira-formulary-strategies-part-d, and https://avalere.com/insights/how-may-the-ira-shift-part-d-market-dynamics and https://www.dlapiper.com/en/insights/publications/2025/01/keeping-watch-on-medicare-access-prescription-drug-plans-and-premiums?utm_source=linkedin_company-dla-piper&utm_medium=social&utm_campaign=ls&utm_term=usa&utm_content=publication and https://www.valueinhealthjournal.com/article/S1098-3015(23)02818-8/fulltext.
[2] Milliman Prescribing a Part D formulary for the new IRA world, 2024, https://www.milliman.com/en/insight/prescribing-part-d-formulary-new-ira.
[3] Keeping watch on Medicare: Access prescription drug plans and premiums 2025.
[4] Coinsurance is an amount of money a beneficiary pays for their medicine that is a percentage of the drug’s price. It is most typically used for higher cost specialty medicines and designated as a fourth or fifth tier on the formulary. On the other hand, a co-pay is a fixed amount, most commonly used on tier three or lower, in a formulary structure.
[5] Dapagliflozin, Empagliflozin, Insulin Aspart, Linagliptin, Semaglutide (Ozempic not Wegovy), Sitagliptin /Metformin Hydrochloride, Sitagliptin Phosphate.
[6] We used an enrollment weighted approach. The enrollment weighting means that co-pays and their averages depend not just on the individual plan formularies but also shifting enrollment as plans exit or preferences change.
[7] 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.
[8] We matched these drugs to the formulary file with National Drug Code (NDC) codes identified through Prescription Drug Data Collection Code (RxDC).
[9] We used the USP Medicare Model Guidelines 9.0 to identify the therapeutic class for each drug.
[10] https://www.dlapiper.com/en-us/insights/publications/2025/03/medicare-drug-price-negotiation-saving-money-for-medicare-but-what-about-patients.
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