Biden-Harris Price Controls Send Drug Prices Soaring

If there’s one axiom we all know about Washington, it’s that it’s full of well-intended policies and unintended (read: harmful) consequences. A recent reminder of the unintended consequences of policies is the so-called Inflation Reduction Act.

The IRA was passed in August 2022, and according to its supporters in Congress and the White House, its goals were to reduce the federal government’s budget deficit, invest in renewable energy, lower drug prices and fight inflation.

Two years later, we have learned anew that noble intentions do not necessarily make good policy. The IRA has failed to achieve its goals in a number of ways. One significant setback is the introduction of drug price controls, which go into effect in 2026. Thanks to the IRA, the federal government now has broad authority to set drug prices through the Medicare Drug Price Negotiation Program.

A recent analysis warns that these pricing rules will likely lead to higher costs for millions of seniors and disabled Americans who rely on Medicare Part D. That shouldn’t come as a surprise — price controls simply don’t work, and when they are implemented, someone will eventually have to foot the bill. It also shouldn’t come as a surprise that government spending doesn’t reduce inflation. History shows the opposite.

The first group of drugs affected by the change includes ten drugs that were selected to receive a “maximum fair price” (MFP) set under an IRA. In 2024, Medicare beneficiaries typically pay fixed co-pays for most of these drugs. For millions of these beneficiaries, the artificially set drug costs will slow their progress toward the Part D out-of-pocket limit, causing them to pay more out-of-pocket costs.

For low-income beneficiaries, the increase in out-of-pocket costs is significant—an average of 27%. Asian and black beneficiaries who rely on MFP medicines could see average increases of 13% and 15%, respectively. As is often the case, the most vulnerable among us will bear the brunt of bad policy.

As bad as that is, it gets worse. The predictable impact of price controls on goods and services is a well-studied topic in economics. That makes the typical combination of good intentions and unintended consequences a hard excuse to swallow.

The question is, who knew what and when? Did HHS Secretary Xavier Becerra and Centers for Medicare and Medicaid Services Administrator Chiquita Brooks-LaSure simply fail to consider the impact of price controls on prescription drugs for seniors? Government agencies rarely endorse legislation without making such projections, yet both Becerra and Brooks-LaSure have been among the most outspoken in supporting and bragging about the IRA’s new price control mandate.

Progressive interest groups whose long-term goal is to abolish private insurance in favor of a one-size-fits-all health care system (e.g., Medicare for All) — as Kamala Harris proposed during her 2020 presidential campaign — have also openly supported price controls as a way to transition America to national health care.

What influence did these special interests have on the Department of Health and Human Services’ analysis of the new law’s impact on Medicare drug prices? Did they suppress research that predicted huge increases for the most vulnerable Medicare members?

Let’s not forget the independent experts who sit on the advisory committee known as MedPAC. Did they also fail to assess the impact of price controls, or did progressive dreams of Medicare for All simply silence any dissenting views?

Scientific integrity only works when objective analysis is allowed. Seniors deserve answers as they seek new ways to pay for skyrocketing prescription drug prices under the Biden-Harris administration and the “well-intentioned” inflation-reduction bill.

The most likely truth is that America’s seniors are being used as guinea pigs or, at best, as eggs in the eventual single-payer omelet. My organization has asked these tough questions and stands ready to hold federal officials accountable if they refuse to answer.

For now, it looks like we may have to see them in court. Hopefully, it’s not too late for seniors to start asking who is responsible for the increasingly unaffordable prices of their medications.

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Originally Posted by RealClearWire