PRI’s scholars responded to today’s action by the Centers for Medicare & Medicaid (CMS) announcing 15 additional drugs under Medicare Part D that will be subject to government price setting effective January 1, 2027. The action was authorized by the Inflation Reduction Act signed by President Biden in August 2022.
According to Sally C. Pipes, PRI President, CEO, and Thomas W. Smith Fellow in Health Care Policy and author of the soon-to-be published book The World’s Medicine Chest: How America Achieved Pharmaceutical Supremacy – and How to Keep It (Encounter Boooks), “these government price controls – ostensibly called price negotiations – are harming the quality of healthcare patients receive today and in the future. A great deal of research has shown that drug price controls reduce total R&D spending by billions (potentially trillions) and destroy the innovative process for new treatments. The lost treatments that inevitably result will impose an exceptionally high cost on patients and their health.”
Wayne Winegarden, Ph.D., Sr. Fellow and Director of PRI’s Center for Medical Economics and Innovation, added that “these costs are no longer theoretical. As has been documented, a top clinical trial firm has warned that its research operations are already significantly reduced because of the IRA’s disincentives.”
Rather than continue down this destructive path, Winegarden “urges the incoming Trump Administration to pause the price negotiation process for this latest tranche of 15 Medicare Part D drugs. Hopefully, this pause will be followed by Congressional action that repeals CMS’ negotiation authority permanently.”
