The Inflation Reduction Act (IRA) of 2022 has brought new urgency to defining the phrase “unmet medical need,” or UMN. The Centers for Medicare and Medicaid Services (CMS) will consider the extent to which a drug addresses a UMN, among other factors, when setting a maximum fair price as part of the Medicare Drug Price Negotiation Program (DPNP). Drugs that address a UMN—defined by CMS as “a disease or condition where no other treatment options exist or existing treatments do not adequately address the disease or condition”—may receive an upward price adjustment (that is, receive a higher relative price) than drugs that do not address a UMN. As a result, how CMS defines a UMN and applies this concept could have important consequences for future investments in medicines for seniors and people with disabilities who get their medications through Medicare.
