Ryan Ellis
Conservative leaders and free market advocates representing associations across the country sent 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."
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
Market Institute
James Edwards
Conservatives for Property Rights
Ryan Ellis
Center for a Free Economy
Ashley Baker
Committee for Justice
Brent Gardner
Americans for Prosperity
John Goodman
Goodman Institute
Grover Norquist
Americans for Tax Reform
Annettee Meeks
Freedom Foundation of Minnesota
Pete Sepp
National Taxpayers Union
Seton Motley
Limited Government
Saulius “Saul” Anuzis
American Association for Senior Citizens
Gerard Scimeca
Consumer Action for a Strong Economy
James Martin
60 Plus
Tom Hebert
Open Competition Center
Grace-Marie Turner
Galen Institute
Christopher G. Sheeron
Action for Health
Karen Kerrigan
Small Business & Entrepreneurship Council
David Williams
Taxpayers Protection Alliance
Paul Teller
Advancing American Freedom
Jeffrey Mazzella
Center for Individual Freedom
C. Preston Noell
Tradition, Family, Property
Dick Patten
American Defense Business Council
Charles Moran
Log Cabin Republicans
Kent Kaiser
Trade Alliance to Promote Prosperity
Dee Stewart
Center for Innovation and Free Enterprise
Patrick Brenner
Southwest Public Policy Institute
Steve Moore
Unleash Prosperity Now
Tom Schatz
Citizens Against Government Waste
Matt Dean
Heartland Institute
Bob Carlstrom
AMAC Action
Phil Kerpen
American Commitment
Tony Zagotta
Center for American Principles
Andrew Langer
Coalition Against Socialized Medicine
Paul Gessing
Rio Grande Foundation
Sally Pipes
Wayne Winegarden, Ph.D.
Pacific Research Institute
Casey Given
Young Voices
Thomas Bradbury
CPAC
Elizabeth Hicks
Consumer Choice Center
Carrie Lukas
Independent Women's Forum
Ryan Walker
Heritage Action Eagle Forum
Ed Martin
Education & Legal Defense Fund
