If there’s one axiom, we all know about Washington, D.C., is that it’s full of well-intentioned policies and unintended (read: harmful) consequences. A recent reminder of unintended policy consequences is the so-called Inflation Reduction Act.
The IRA was passed in August 2022, and according to its champions in Congress and the White House, it was intended to reduce the federal government budget deficit, make investments in renewable energy, lower drug prices, and fight inflation.
Two years later, we’ve unfortunately re-learned that noble intentions don’t necessarily produce good policy. The IRA has failed to achieve its objectives in many ways. One significant problem involves the introduction of drug price controls, which take effect in 2026. Due to the IRA, the federal government now has wide-ranging authority to set the price of drugs through what’s known as the Medicare Drug Price Negotiation Program.
A recent analysis warns that these pricing provisions will likely lead to higher costs for millions of seniors and disabled Americans who rely on Medicare Part D. This shouldn’t come as a surprise—price controls simply don’t work, and when they’re implemented, someone will eventually have to pick up the tab. Nor should it be surprising that government spending doesn’t reduce inflation. History shows quite the opposite.
The first group of impacted drugs includes ten medicines that have been selected to have a “maximum fair price” (MFP) set under the IRA. In 2024, Medicare beneficiaries typically pay fixed copays for most of these drugs. For millions of these beneficiaries, artificially fixed-drug costs will slow their progression toward their Part D out-of-pocket limit, making them pay more in out-of-pocket costs.
For low-income beneficiaries, the out-of-pocket cost increases are significant—averaging 27% more. Asian and black beneficiaries who rely on the medicines subject to an MFP could experience an average increase of 13% and 15%, respectively. As is too often the case, the most vulnerable among us will bear the brunt of bad policy.
As bad as this all is, it gets worse. The predictable impact of price controls on goods and services is a well-researched topic in economics. This makes the typical combination of good intentions and unintended consequences a tough excuse to swallow.
The question then becomes who knew what and when? Did HHS Secretary Xavier Becerra and Center for Medicare and Medicaid Services Administrator Chiquita Brooks-LaSure just fail to consider the impact of price controls on seniors’ prescription drugs? Government agencies rarely endorse legislation without conducting such forecasting, yet both Becerra and Brooks-LaSure were among the most vocal to endorse and boast about the IRA’s new price control mandate.
Progressive special interests whose long-term goal is abolishing private insurance in favor of a single-payer health care system (e.g., Medicare for All)— as Kamala Harris proposed during her 2020 presidential run—have also vocally supported price controls as a means of moving America toward government-run health care.
What influence did these special interests have on the Department of Health and Human Services’ analysis when assessing the impact of the new law on Medicare drug prices? Did they suppress research that projected massive increases for the most vulnerable members of the Medicare program?
Don’t forget about the independent experts that serve on an advisory committee known as MedPAC. Did they also fail to assess the impact of price controls or did progressive dreams of Medicare for All just silence any dissenting views?
Scientific integrity only works when objective analysis is permitted to exist. Seniors deserve to hear answers as they are looking for new ways to afford skyrocketing prescriptions drugs at the hands of the Biden-Harris administration and the “well-intentioned” Inflation Reduction Act.
The most likely truth is that American seniors are being used as guinea pigs or, at best, eggs for the eventual single-payer omelette. My organization has asked these tough questions and is prepared to hold federal officials accountable if they refuse to provide answers.
So far, it’s looking like we might just have to see them in court. Let’s just hope it’s not too late for seniors asking who’s responsible for their increasingly unaffordable drug prices.
Martin Hoyt is the Director for Public Health Reform Alliance.
Reprinted with Permission from The Daily Signal – By Martin Hoyt
The opinions expressed by columnists are their own and do not necessarily represent the views of AMAC or AMAC Action.
Price controls always lead to supply shortages, which in turn always lead to higher prices. This has been proven out numerous times in every country that has gone down this hole. We even were dumb enough to try it here for a time in the 1970s with disastrous results. That Democrats are embracing this failed policy yet again and suggesting that “this time will be different” (famous last words before the SHTF) just highlights, yet again, why Democrats are completely unfit to hold any office.
Of course, the larger question is will the American public make the right choice this November or will they embrace the political party that will only continue to destroy our country? The whole is watching.
” Price controls simply don’t work, and, when they’re implemented, someone will eventually have to pick up the tab”. This statement from the featured article is correct, while the Harris Campaign is merely corrupt… and not trying to lower the cost or raise the standard of anything. They’re just trying to get an inexperienced manager elected.
I was very troubled when I heard Ms. Harris state that pharmaceutical companies were “ripping us off”.
The FDA regulations that pharmaceutical companies must comply with make both R&D and manufacturing of pharmaceutical products hideously expensive… and costs are still rising, due to material and transportation costs from this administration’s unsatisfactory performance at their own jobs. I know this from having managed pharmaceutical design and construction projects for many years. They have indoor environments that are among the cleanest of all industries, and those very large air handling systems introduce 100% outdoor air just about every day of the year. Their staff members are all highly educated, the materials they consume are enormously costly, and their facilities are breathtakingly expensive to design, construct, and maintain.
I could keep talking about this all evening, but the bottom line is that, once again, Ms. Harris & Co. have relied on a “straw-man” approach to defending themselves and deflecting criticisms, in lieu of admitting that their own economic stewardship of this country has been conspicuously unsatisfactory. Many of us know way more about pharmaceutical and other industry costs than Ms. Harris seems to know about managing fiscal policy. A good starting point would be for her campaign to stop misrepresenting these issues.
When Ronald Reagan said, “The nine most terrifying words in the English language are I’m from the government and I’m here to help”, did he have any idea how right he was?
The drug manufacturers advised the Biden Administration that they people wouldn’t notice the increase in “out of pocket” cost increases in the Inflation Reduction Act. Um, ….I’m almost sure that the drug purchasers will notice this effect at the pharmacy counter.
Anyone on the government drug assistance program who votes for a Democrat candidate on November 5th, deserves what he or she gets, ……….. good and hard.
Democrats intentionally destroy everything they touch.
IMO
This should open the eyes of all the sleep walkers who vote democrat because their daddies and mommies told them 60 years ago they fight for little man and in turn they told the same to their children.
Call it what it is, Inflation Increase Act. All the money we had saved from President Trumps tax cuts and practically Zero Inflation we now have no money and can’t afford gasoline, diesel, jet fuel, utilities, rent, mortgages, car payments, Credit Card payments, Insurance, food or medicine thanks to Dictator Beijing biden, Communist harris, Swamp Queen pelosi, and democrats. All the money for the Inflation Increase Act went to their Global Warming lie with only democrat ran States getting the majority of any money at taxpayers expense. Don’t forget they wasted $9 Billion to build only 8 EV Charging Stations in the whole country.
They want seniors “out of the way” by outpricing their drugs. What happens if you can’t afford life sustaining medications? Death!
The Dems will do anything for the vote this will fail just like I have talked to many that were on Obama Care they went to something else that was better because it is not and they were paying a high price for the Obama care another great policy that is failing but the Dems will support it everywhere in this country to make it look like it is so great and it is not just like the drugs it will never last but Harris and others will never admit to nothing.and there will be supply shortages that will be coming because of what they are doing.
Is there nothing that the dingbats in the Totalitarian Communist Democrat Party done that has worked?
Ironically, paying for my mom’s prescription drugs is still cheaper then buying food!
We so far have not needed prescription drugs. The few we have tried gave us bad side effects and we switched to natural alternatives… So, we don’t have to worry about this yet. However, we may need some in the future, but I pray not. Drugs don’t cure anything, they usually just control symptoms except for antibiotics… Perhaps more natural alternatives will be considered someday. Until then, we are on our own to check out all our medical options and act accordingly.