The views and opinions expressed in this editorial article are those of the author and do not reflect the official policy or position of the Post or Eagle Media. The editorial is intended to stimulate critical thinking and debate on issues of public interest and should be read with an open mind. Readers are encouraged to consider multiple sources of information and to form their own informed opinions
By: CRAIG BOWSER
Four years ago this month, President Biden signed the Inflation Reduction Act, promising that letting Medicare dictate drug prices would save taxpayers over $100 billion and lower costs for seniors. The results are in, and they tell a different story. It's time for Congress to repeal the law's pharmaceutical price-setting provisions before the damage becomes permanent.
Start with the people the law was supposed to help. A recent Medicare Part D survey found that nearly half of respondents paid more, not less, for at least one of the ten drugs first chosen for government-mandated prices. Low-income seniors and those in poor health fared worst, more than twice as likely as their wealthier counterparts to say they paid more. Three in ten beneficiaries had trouble getting a prescription filled last year, up from a quarter the year before. This isn't the relief Americans were promised.
The long-term outlook is grimmer still. Economist Tomas Philipson and colleagues at the University of Chicago find that suppressing a brand-name drug's revenue before its patent exclusivity expires discourages generic and biosimilar makers from entering that market once exclusivity ends. Fewer rivals mean weaker downward pressure on prices for years afterward. Their modeling suggests the policy could ultimately push average lifetime costs for the first selected drugs up by nearly a fifth. Washington can dictate a lower price today, but it can't legislate a crowded, competitive marketplace tomorrow, and that marketplace is what has made generics nine of every ten prescriptions filled in this country.
The law is also reshaping medical progress in ways few voters grasped when it passed. Drugmakers routinely spend years after a medicine's first approval refining it: easier-to-administer injections instead of hour-long infusions, new formulations, new uses for existing therapies. Nearly four in ten novel drugs eventually see this kind of follow-on work. But shrink the expected payoff and companies have less reason to fund it. Studies tied to the law's pricing rules already point to well over a hundred fewer new treatments reaching patients over the next two decades. Eli Lilly cited the statute directly when it shelved a promising blood-cancer program in 2022.
Regulators now want to go further, treating separately developed, separately FDA-approved medicines as a single product for pricing purposes, years before their statutory clock would otherwise start. That's not a technical adjustment. It tells investors the rules can shift after their money is committed, and capital has plenty of other places to go.
Cheaper medicine is a goal worth pursuing. But a scheme that narrows the field of competitors, discourages the next generation of treatments, and still leaves seniors footing higher bills isn't the way to get there. Congress should repeal the IRA's drug-pricing mandates and replace them with reforms that expand competition rather than choke it off.