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Coalition Letter Opposing Inflation Reduction Act Prescription Drug Price Controls



Ryan Ellis


Conservative leaders and free market advocates representing associations across the country send a letter to Speaker Johnson and Leader McConnell in opposition to the IRA's prescription drug price controls.


"Instead of hiring more bureaucrats to set up a new price control board, Congress should work to lower Medicare premiums, increase plan choices, and require insurers and pharmacy benefit managers to share discounts, rebates, and savings with patients. It's also time that lawmakers take a hard look at foreign countries who are buying U.S.-developed medicines for pennies on the dollar. American patients shouldn't be subsiding the rest of the world's access to medicines."


See the letter text and signers below, or download a PDF




June 25, 2024


The Honorable Mike Johnson

568 Cannon House Office Building

Washington, DC 20515

 

The Honorable Mitch McConnell

317 Russell Senate Office Building

Washington, DC 20510 


Dear Speaker Johnson and Leader McConnell: 


President Biden's Inflation Reduction Act has been an across-the-board failure. The law arguably made inflation worse by wasting billions on progressive boondoggles such as "Green New Deal" tax credits that benefit China, electric vehicle giveaways, and bigger handouts to insurance companies and affluent families who enroll in Obamacare. The law imposed costly new taxes on U.S. businesses that employ millions of Americans.


The IRA also raided $300 billion from Medicare to fund President Biden's progressive wish list. At a time when millions of seniors across the country are struggling, cutting Medicare for current and near retirees is the last thing we should be doing. Savings in Medicare should be used for Medicare reform, to extend the life of the program and avoid a costly taxpayer bailout. It should not be a slush fund for the Left. 


Democrats claimed that their changes to Medicare would give Americans some much-needed relief at the pharmacy counter, but all signs suggest that the law is making it much harder for patients to access life-saving drugs. Two-thirds of Americans say this failed law hasn't helped them at all, and it's easy to see why.

The law permits government bureaucrats to impose price controls on certain medicines covered under Medicare. This provision was billed as a gift to America's seniors, but it is precisely the opposite. 


The IRA has done little to deliver the savings seniors were promised; it has actually led to higher costs. Monthly premiums for Medicare Part D prescription drug plans have risen sharply since the IRA became law. According to the Kaiser Family Foundation, premiums for Medicare prescription drug plans spiked 21 percent in the year after passage of the law.  The Council for Affordable Health Coverage estimates that number could skyrocket another 50 percent or more next year. At the same time, the number of Part D plans seniors can choose from has fallen dramatically.


Remember, the stated goal of the IRA was to make prescription medicines cheaper for seniors. Instead, Biden and Democrats in Congress managed to make monthly premiums for prescription drug coverage more expensive. 

 

As if this wasn't enough, the IRA also created a $3 billion new federal bureaucracy that will allow more government interference in decisions that should be between patients and their doctors. 


History shows that price controls never achieve their stated ends and the IRA’s price controls are further evidence. Basic economics dictates that imposing price controls on one class of products will simply force manufacturers to stop producing or investing in those products. This, in turn, leads to scarcity of the price-controlled product.


This isn't theoretical. Patients in countries that allow drug price controls consistently lack access to novel medicines. More than half of new drugs approved from 2018 to 2022 were launched first in the United States, according to a recent analysis from the RAND Corporation. Patients living in other countries routinely have to wait an additional year to access newly approved medicines.


Another recent study found that patients on public insurance plans in the United States have access to 85% of new drugs approved from 2012 to 2021. In Germany, the United Kingdom, and France, publicly insured patients have access to 61%, 48%, and 43% of new drugs, respectively. 


The lack of drug price controls in the United States is a major reason we've become the world's pharmaceutical leader. As many as two-thirds of new medicines originate in the United States.


The drug pricing provisions in the IRA are in no way a "negotiation." In a true negotiation, both parties have the ability to walk away from the table. But companies that do not comply with the IRA's price controls have to pay up to a 95% tax on the gross sales of the medicine in question. The 95% tax creates a dangerous precedent for state power. It's easy to imagine the government using a similar mechanism to impose price controls on any consumer product on a whim. Nationalizing entire industries is what socialist dictatorships do, not America.


Instead of hiring more bureaucrats to set up a new price control board, Congress should work to lower Medicare premiums, increase plan choices, and require insurers and pharmacy benefit managers to share discounts, rebates, and savings with patients. It's also time that lawmakers take a hard look at foreign countries who are buying U.S.-developed medicines for pennies on the dollar. American patients shouldn't be subsiding the rest of the world's access to medicines.


For all these reasons and more, we welcome the opportunity to work with you to enact meaningful, market-based reforms that work for all Americans.

 

Sincerely,


Charles Sauer                                                James Edwards

Market Institute                                             Conservatives for Property Rights

 

Ryan Ellis                                                      Ashley Baker

Center for a Free Economy                          Committee for Justice

 

Brent Gardner                                               John Goodman

Americans for Prosperity                              Goodman Institute

 

Grover Norquist                                             Annettee Meeks

Americans for Tax Reform                           Freedom Foundation of Minnesota

 

Pete Sepp                                                      Seton Motley

National Taxpayers Union                            Limited Government

 

Saulius “Saul” Anuzis                                   Gerard Scimeca

American Association for Senior Citizens    Consumer Action for a Strong Economy

 

James Martin                                                  Tom Hebert

60 Plus                                                            Open Competition Center

 

Grace-Marie Turner                                       Christopher G. Sheeron

Galen Institute                                                Action for Health

     

Karen Kerrigan

Small Business & Entrepreneurship Council

 

David Williams                                                Paul Teller

Taxpayers Protection Alliance                     Advancing American Freedom

 

Jeffrey Mazzella                                              C. Preston Noell

Center for Individual Freedom                       Tradition, Family, Property

 

Dick Patten                                                       Charles Moran

American Defense Business Council             Log Cabin Republicans

 

Kent Kaiser                                                       Dee Stewart

Trade Alliance to Promote Prosperity            Center for Innovation and Free Enterprise

 

Patrick Brenner                                                 Steve Moore

Southwest Public Policy Institute                    Unleash Prosperity Now

 

Tom Schatz                                                        Matt Dean

Citizens Against Government Waste               Heartland Institute

 

Bob Carlstrom                                                    Phil Kerpen

AMAC Action                                                   American Commitment

 

Tony Zagotta Andrew Langer

Center for American Principles Coalition Against Socialized Medicine


Paul Gessing Sally Pipes

Rio Grande Foundation Wayne Winegarden, Ph.D.

Pacific Research Institute


Casey Given Thomas Bradbury

Young Voices CPAC


Elizabeth Hicks Carrie Lukas

Consumer Choice Center Independent Women's Forum


Ryan Walker Ed Martin

Heritage Action Eagle Forum Education & Legal Defense Fund











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