The Truth Behind the IRA

Nearly every senator who voted for the Inflation Reduction Act celebrated its second anniversary, claiming that the legislation reduced healthcare costs for Americans. Sen. Bob Casey of Pennsylvania and Vice President Kamala Harris, who cast the tie-breaking vote for the IRA, are counting that Americans won’t look for the facts beyond the headlines.

Healthcare spending now accounts for 20 percent of our nation’s economy. We’ve nearly doubled our spending since Obamacare’s broken promise of affordability. Worse yet, growing health insurance costs are chewing up an increasing proportion of what American workers take home, with a higher percentage of wages going toward premiums, especially among Black, Hispanic, and lower-income workers.

The problem has accelerated, with the biggest spikes in individual and family premiums between 2022 and 2023.

Earlier this year in Pennsylvania, Casey laid out bold claims about the IRA that turned out to be false advertising.

What were those falsehoods?

The IRA is “Lowering Prescription Costs,” Casey claimed. However, prices for new drugs rose 35 percent in 2023, more than in previous years.

The IRA is “Reducing Health Care Premiums,” Casey stated. He is wrong again. As reported in Politico, the IRA machinations were set to cause premiums to rise this November for Medicare patients. An embarrassing problem the Biden administration is trying to cover up by raiding the national piggy bank by $5 billion a year. In other words, the policy was not only going to cause increased costs for seniors but forced American taxpayers to pay to hide their mistakes.

Casey remains silent, as does the White House, while Republicans in the Senate and House challenge the highly politicized move.

Casey claims the IRA “caps insulin at $35 a month.” Savvy Americans read the smaller print to know that the cap is for the co-pay only, not the total price. While Casey and Biden like to take credit for the insulin cap, it was a pharma CEO who floated the idea in 2019 for Medicare patients. The pharmaceutical companies capped the co-pay cost of insulin for patients during the pandemic.

While the IRA cheerleaders blamed pharma for the cost of drugs, they ignored the drug middlemen, pharmacy benefit managers, whose “rebates” accounted for 80 percent of the cost of insulin and similar amounts for other drugs. Those who voted for the IRA gave the PBMs a free pass in the IRA by repealing a Trump-era executive order that would have steered $200 billion annual worth of those rebates directly to patients at the pharmacy counter.

Worse yet, the IRA has stifled innovation in one of America’s most fruitful sectors —  the biotech industry.  This is especially a problem for Americans with cancer whose lives depend on discoveries.

Instead of pretending the IRA is a smashing success, legislators might turn toward bipartisan legislation from the House of Representatives that is gaining traction. Reps. Jake Auchincloss of Massachusetts and Diana Harshbarger, a pharmacist from Tennessee, worked across the aisle to introduce the Pharmacists Fight Back Now Act.

The legislation ensures that most “rebates” end up in the pockets of seniors instead of PBM piggybanks. American Pharmacy Cooperative Inc. data show that the bill will decrease the out-of-pocket costs of seniors by $40 billion yearly. In addition, the bill prevents PBM middlemen from paying independent pharmacists less than their cost to do business and prevents PBMs from steering patients to their vertically integrated big-box pharmacies. This will allow trusted, independent mom-and-pop pharmacies to survive.

While Harris and Casey high-five each other to hide the colossal failures of the IRA, hard-working Americans will continue to pay more. Americans are wise enough to know that inflation has not just affected food and gas, it’s caused a healthcare problem, too.  Casey and Harris have proven that their failed policies are responsible for the growing cost of healthcare. It’s time to stop doubling down on failed policy and lift bipartisan legislation like the Pharmacists Fight Back Act that strikes at the heart of the PBM middlemen responsible for increased costs.

Reprinted with permission from DC Journal by Marion Mass.

The opinions expressed by columnists are their own and do not necessarily represent the views of AMAC or AMAC Action.