Inflation Reduction Act Continues to Harm the Pharmaceutical Industry and Limit New Drug Development
As TAPP has stated in the past, the Inflation Reduction Act and its price controls are damaging the pharmaceutical industry and preventing drug research. Now that this horrible piece of legislation is a year old, let's recap the many negative aspects of it.
The Inflation Reduction Act significantly impacts Part D access and choice for patients, especially for seniors and people with disabilities.
The Centers for Medicare and Medicaid do not listen to stakeholder concerns, and there is no plan in place to evaluate issues or implement feedback.
The agency is vague when describing price control criteria and withholds important information. There is also limited communication between the Centers for Medicare and Medicaid and drug manufacturers.
The Centers for Medicare and Medicaid is using an expansive interpretation of drugs subject to price setting, encompassing any variant of a drug with the same core molecule or active ingredient from the manufacturer when creating price controls. This could lead to recent FDA-approved drugs being subjected to price setting if they share the core molecule with older versions, disregarding the new drug's substantial patient benefits.
The law inhibits competition among generics and biosimilars entering the market, as the Centers for Medicare and Medicaid final guidance introduces a vague "bona fide marketing" criterion based on sales data, ignoring insurers' and pharmacy benefit managers’ coverage decisions.
Price controls created through the Inflation Reduction Act greatly limit drug research and development.
The Inflation Reduction Act opens the door for implementing socialist medical policies from failed foreign healthcare systems.
The Inflation Reduction Act sets the United States back in terms of international competition. Historically, Americans have had access to drugs far sooner than patients in other countries.
As if these destructive effects were not enough to disavow the Inflation Reduction Act, there is evidence proving this model could never work. A recent article from Erica York said the following, “We don’t have to look far to see how similar drug pricing policies have played out around the globe. Drug pricing policies in the European Union have discouraged R&D and slowed patient access to new drugs. For example, patients in the United States have access to 93 percent of new cancer treatments that have been approved since 2012, while patients in other countries have much lower access—Germany (71 percent), United Kingdom (69 percent), France (64 percent), and Canada (59 percent). Capping prices and profits in the United States, as the Inflation Reduction Act does, invites similar delays and lack of access for U.S. patients.”
It is clear that the Inflation Reduction Act is dangerous for Americans. Whether it be the limited patient accessibility, the stunting of drug research and development, or something else, no good comes from this legislation.
Ultimately, a substantial conversation about drug pricing should delve into the fundamental forces that influence the biopharmaceutical field. This is why TAPP urges Congress to do a serious review of the Inflation Reduction Act’s implementation and strive to alleviate the negative impacts of the new drug pricing regulations.