The Inflation Reduction Act’s broken promise is still costing patients

When President Biden signed the Inflation Reduction Act into law, his administration promised it would make prescription drugs more affordable and accessible for seniors.

A recent analysis found that nearly one in four initial attempts by patients to fill a prescription for one of the first drugs selected for Medicare’s drug price negotiation program was rejected. Patients relying on immunology and oncology treatments felt this even more intensely, with rejection rates climbing as high as 59 percent and 67 percent, respectively.

The lesson from the Inflation Reduction Act and other countries around the world is simple: Government drug price controls do not improve patient access. In many cases, price controls create incentives to ration care and empower government bureaucrats at the expense of patients and the development of new therapies.

That dynamic is playing out across Medicare Part D, which has undergone a significant overhaul over the past several years.

According to the Congressional Budget Office, the Inflation Reduction Act increased taxpayer costs while also jacking up premiums for consumers and out-of-pocket costs for many patients. While the law caps seniors’ annual out-of-pocket costs at $2,100 this year, other dynamics are shifting fixed dollar co-payments per prescription to percentage-based fees tied to the cost of the drug. Because most seniors have drug costs less than $2,000, many are paying more out of pocket.

The law also required new mandatory manufacturer discounts, shifted billions of dollars in financial responsibility from Medicare to private Part D plans, and completely redesigned how prescription drug benefits are provided. This tripled the financial risk borne by plans, which are now raising premiums on consumers or exiting the market entirely.

Rather than fixing the problem, the Biden administration launched a temporary Part D Premium Stabilization Demonstration, spending billions of taxpayer dollars to help some of the country’s largest health insurers keep premiums artificially low. This did not address the structural flaws created by the Inflation Reduction Act; it simply delayed them.

The Trump administration is ending the demonstration at the end of the year . With billions in temporary taxpayer support going away, the full impact on 2027 premiums will soon become clearer. What is already apparent is that the Inflation Reduction Act didn’t reduce costs; it simply shifted them throughout the Medicare program.

By requiring plans and manufacturers to shoulder significantly more of the cost of expensive medicines, the redesign also risks weakening incentives to innovate by creating greater uncertainty about whether companies can recoup the significant time and resources required to develop new treatments. At the same time, plans facing greater financial liability have stronger incentives to manage their formularies more aggressively, potentially limiting patient access to cutting-edge therapies.

Now, career bureaucrats at the Centers for Medicare and Medicaid Services are considering a policy that could further reduce patient access to innovation. The Inflation Reduction Act defined a “Qualifying Single Source Drug” as a product family, not a single product, essentially allowing bureaucrats the latitude to include as many drugs as possible into their price controls. Under the proposal, these bureaucrats could group separate drugs that have each received their own FDA approval simply because they share the same active ingredient and subject them to Medicare price negotiation on the same timeline, even when the newer medicine represents a meaningful improvement over the original.

These follow-on innovations require years of additional research and new clinical trials, often making treatments safer, more effective, or easier for patients to receive.

Treating these advancements as if they were the same drug would reduce incentives to invest in the kinds of improvements that make a real difference for patients.

Patients with multiple myeloma, for example, previously spent hours receiving an IV infusion of Darzalex . Thanks to continued innovation, many patients can now receive Darzalex Faspro, a quick subcutaneous injection administered in only minutes. That improvement required additional research, clinical trials, and FDA approval, but it has made treatment far more convenient for patients.

Under Medicare’s proposal, innovators could have less reason to pursue similar advances if meaningful improvements are treated no differently than the original medicine for purposes of Medicare price negotiation. Over time, patients could lose out on the next generation of treatments that make medicines safer, more effective and easier to use.

This harmful law is already disrupting the market and driving up costs. Career bureaucrats shouldn’t use the law to worsen its impact by further limiting patient access to care and future medical innovation.

Joel White is the president of the Council for Affordable Health Coverage. He previously served as staff director of the House Ways and Means Committee. Hannah Anderson is the senior director of policy for the Center for a Healthy America at AFPI and the former deputy chief of staff for the Department of Health and Human Services .