This blog is part of an ongoing series on A Brave New World: State of the Industry.

Among other provisions, the Inflation Reduction Act (IRA) created the Medicare Prescription Payment Plan (MPPP or M3P), which allows Medicare patients to spread their drug costs over the course of a year. The intention is to help patients further in affording their prescriptions. Any individual enrolled in a Medicare prescription drug plan would be eligible to sign up for M3P either at the time of open enrollment for the 2025 benefit year or at any time throughout the calendar year.

Initial studies show that only a small portion of Medicare beneficiaries with high drug costs have enrolled in M3P so far this year, and there is still very little visibility into the implementation and use of M3P. With access to pharmacy claims data from millions of Medicare patients, IQVIA sheds more light on the new program and its impact on patient affordability.

Measures of M3P enrollment in the beginning of 2025 indicated that only 15% of Medicare beneficiaries that were deemed “likely to benefit” actually signed up for the program – either at the beginning of the year or after having been prompted at the pharmacy due to their out-of-pocket costs. Further analysis of claims data indicates that across all Medicare Part D, only 0.53% of patients have filled at least one prescription using M3P as of June 2025. The proportion of Part D claims with M3P was even lower, at 0.26%.

Proportion of Claims with M3P (Medicare)

M3P enrollment and utilization are below expectations, given how much of the Medicare population could benefit from M3P. This is likely the result of challenges with patient awareness and program implementation. Patients with out-of-pocket costs greater than $600 for a transaction should be prompted with the opportunity to enroll in M3P. CMS also recommended that patients enroll in M3P if they expect to accumulate costs of $2,000 in the first three quarters of the year. While M3P use is more prevalent among patients with costly conditions, utilization did not exceed 2.18% across top therapeutic areas.

Proportion of Claims with M3P vs. Average Patient Cost Exposure (Jan-Jun 2025, Medicare)

Pharmacists, health insurance administrators, and patients alike have expressed their confusion as well as frustration with M3P issues in online forums^1,2,3. Despite the creation of the M3P program and corresponding guidelines from CMS, using M3P at the point-of-sale has not been straightforward. Even when patients and pharmacists attempt to use M3P for a given prescription, they might face errors and processing issues that can dampen uptake of the program. Be it a matter of awareness or implementation, 97% of Medicare claims with cost exposures above $125 still did not use M3P.

Distribution of Medicare Claims by Patient Cost Exposure

For the patients who do manage to leverage M3P in lowering their costs at the pharmacy, they receive a monthly bill from CMS. However, their costs are distributed into smaller payments over the course of a year, which can be especially helpful for a population that tends to live on fixed incomes. It is likely that in years to come, M3P use will grow as the programs become even more socialized and systematized. Despite efforts to reduce Medicare costs through a $2,000 cap and other out-of-pocket limits, seniors would continue to benefit from any measures that improve access.

Further understanding of M3P utilization as well as other changes to Medicare from the Inflation Reduction Act can help quantify the impact to patient affordability as well as support short- and long-term forecasting. In an ever-changing industry with more unpredictability than ever, keeping a pulse on emerging trends is a strategic necessity.

The authors would like to thank Lucy Millman and Senay Gokcebel for their contributions to this blog.

References:

1. Medicare Prescription Payment Plan Crash Course, r/Pharmacy on Reddit, January 2025.
2. M3P Medicare D Problems?, r/Walmart_Rx on Reddit, January 2025.
3. M3P Billing Procedure, r/WalgreensRx on Reddit, February 2025.