Biden-Harris Price Controls Causing Senior Drug Prices to Skyrocket

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 (IRA). 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.

Price controls on Medicare drugs

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.

Out-of-pocket costs

For low-income beneficiaries, the out-of-pocket cost increases are significant – averaging 27 percent more. Asian and Black beneficiaries who rely on the medicines subject to an MFP could experience an average increase of 13 percent and 15 percent, 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.

Price controls as the entering wedge in destroying private insurance

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.

Guinea pigs

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.

This article was originally published by RealClearHealth and made available via RealClearWire.