Incoming administration and new Congress should halt policy that negatively affects patients and American workers
The Centers for Medicare and Medicaid Services’ (CMS) announcement of 15 new drugs to be subject to price controls under the Inflation Reduction Act (IRA) represents the continuation of a flawed federal policy that has failed to achieve its stated goals and is causing significant health and economic harm.
“It is unfortunate that the Biden Administration is using this announcement to posture politically in its waning days rather than make serious efforts to improve health outcomes. That said, this announcement represents an opportunity for the incoming Trump Administration and a newly elected Congress to give this policy fresh and needed scrutiny,” said We Work For Health Executive Director Dan Leonard. “The evidence is in and it is clear that the IRA’s drug pricing provisions have not delivered promised savings to patients. Instead, they are causing major damage to the nation’s medical innovation ecosystem, quashing the development of critical drugs for unmet patient needs, and setting the stage for the loss of hundreds of thousands of jobs.”
A recent analysis of the first 10 drugs selected by CMS for price controls found the federal government’s estimate of $6 billion in Medicare savings to be inaccurate and misleading. The study, authored by the IQVIA Institute for Human Data Science, found that the IRA’s drug pricing provisions will likely lead to increased patient cost-sharing and access barriers for the selected medications, with patients unlikely to see consistent cost reductions.
The negative consequences of prescription drug price controls are already playing out. New research previewed this month found that investment in small molecule drug development has dropped by 70% since the Inflation Reduction Act was introduced in 2021. Small molecule drugs represent more than 90% of prescriptions filled in the United States and include the pills, tablets, capsules, and creams used to treat health conditions such as heart disease, depression, and other mental illnesses, neurological conditions, and many cancers.
Leonard continued, “Our elected leaders must also keep in mind that the biopharmaceutical sector is a major economic engine in many states and communities, supporting millions of jobs. Reducing investment in new therapies will cause significant harm to one of America’s most innovative industries as well as the many small businesses that provide services and supplies to this critical industry.
“There are other, more effective policy options to make prescription drug costs more affordable, including reining in the corporate middlemen who actually control out-of-pocket costs and medication access. We are hopeful the new administration and Congress will make the right choices for America and Americans’ future.”
About We Work For Health
We Work For Health brings together national and local business leaders, and labor, biopharma, patient advocacy and other healthcare-related stakeholders to support policies and initiatives that foster innovation and facilitate the delivery of lifesaving and life-enhancing medicines. As the bedrock of innovative jobs in the U.S. today, the life sciences sector supports more than 4.9 million American employees. Advancing and protecting these jobs is critical for those employees, the economies they support, and the patients they serve.
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