Article by Martin Hoyt of RealClearHealth
If there’s one axiom we all know about Washington, DC, it’s that it’s rife with well-intentioned policies and unintended (i.e. harmful) consequences. A recent reminder of unintended policy consequences is the so-called Inflation Control Act (IRA). Passed in August 2022, the IRA was intended to reduce the federal budget deficit, invest in renewable energy, lower drug prices, and fight inflation, according to supporters in Congress and the White House.
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Two years later, we are unfortunately reminded that noble intentions do not always produce good policy. The IRA failed to achieve its objectives in many ways. One big problem is the introduction of drug price controls, which will take effect in 2026. Thanks to the IRA, the federal government now has broad powers to set drug prices through so-called “price controls.” Medicare Drug Price Negotiation Program.
a Recent Analysis They warn that these pricing provisions will likely lead to increased costs for millions of seniors and people with disabilities who rely on Medicare Part D. This is not surprising. Price controls simply don’t workAnd if that happens, someone ultimately has to pay for it. It is not surprising that government spending does not suppress inflation; history has shown the exact opposite.
The first group of affected drugs includes 10 drugs that have a “maximum fair price” (MFP) set under an IRA. Medicare beneficiaries typically pay a fixed copayment for most of these drugs in 2024. For millions of these beneficiaries, the artificially fixed drug costs will slow their progression toward their Part D out-of-pocket limits and result in higher out-of-pocket costs.
For low-income beneficiaries, the increases in out-of-pocket costs will be significant, increasing by an average of 27 percent. Asian and Black beneficiaries who rely on MFP-covered medications may experience average increases of 13 percent and 15 percent, respectively. As is so often the case, the most vulnerable will bear the brunt of misguided policies.
As bad as everything is, it gets even worse. The impact of price controls Investment in goods and services is a well-studied topic in economics, so the classic combination of good intentions and unexpected consequences makes for an untenable excuse.
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So the question arises: Who knew what and when? Didn’t Health and Human Services Secretary Xavier Becerra and Centers for Medicare and Medicaid Services Administrator Chiquita Brooks LaSure consider the impact of price controls on prescription drugs for seniors? Government agencies rarely approve legislation without making such predictions, but Becerra and Brooks LaSure were the most skeptical. vocal To support and boast about the IRA’s new price control mandate.
Progressive special interest groups have a long-term goal of eliminating private insurance and replacing it with a single-payer health care system (e.g., Medicare for All). Kamala Harris Lawmakers who supported her proposed price control bill during the 2020 presidential election have also been vocal supporters of price controls as a means to move America toward government-run health care. How did these special interests influence the Department of Health and Human Services’ analysis in assessing the impact of the new law on Medicare drug prices? Did they suppress a study that predicted huge price increases for Medicare’s most vulnerable members?
Let us not forget the independent experts on the advisory committee known as MedPAC. Did they also fail to assess the impact of price controls, or was the progressive dream of Medicare for All simply silencing dissenting voices? Scientific integrity only works if objective analysis is allowed. Seniors who are looking for new ways to afford prescription drugs that are becoming more expensive under the Biden-Harris Administration and its “well-intentioned” inflation control bill deserve to hear answers.
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The most likely truth is that older Americans are being used as guinea pigs, or at best, as eggs in an eventual single-payer omelette. My organization is asking these tough questions and is prepared to hold federal officials accountable when they refuse to answer. For now, it looks like we have no choice but to take them on in court. Let’s hope it’s not too late for seniors to ask who is to blame for increasingly unaffordable drug prices.
Martin Hoyt is the executive director of the Alliance for Public Health Reform, a nonpartisan organization that works to increase transparency and oversight of our public health system to make it better for all Americans.
Distributed with permission From RealClearWire.
