President Biden's time in office has finally expired. But his signature legislative accomplishment—the Inflation Reduction Act—will keep negatively impacting Americans for years to come.
Americans got a fresh reminder of the IRA's ongoing damage in the administration's final week, when officials announced 15 additional medicines that will be subjected to Medicare price controls starting in 2027.
Those price controls, along with the law's other provisions, are slowing the pace of medical innovation and driving up costs for patients. It's up to Congress and the Trump administration to minimize the damage and roll back the Inflation Reduction Act wherever possible.
When lawmakers were debating the Inflation Reduction Act, critics warned that price controls would reduce companies' incentives to invest in medical research. And that's exactly what has happened. So far, biotech firms have pulled the plug on at least 40 research projects and 22 experimental drugs because of the IRA.
This foregone research comes at a real human cost. Scholars at the University of Chicago predict that 331.5 million life years will be lost by 2039, with 135 fewer drugs released.
And for the most part, the law isn't delivering the improved access to medicines, or the cost savings, that Biden promised.
When Medicare officials released their first list of price-capped medicines in 2023, the Biden administration predicted billions in savings for patients. Yet because of the way the law is structured, more than 3 million seniors will see their Medicare Part D out-of-pocket costs increase in 2026, according to a recent Milliman analysis. Low-income seniors will experience the greatest cost increases.
The same will doubtlessly hold true for patients who take the 15 newly selected drugs.
The insurance companies that manage Medicare drug plans also react to price controls by altering their lists of covered medicines to maximize profits. And they've dramatically hiked premiums in response to several of the IRA's provisions that saddled insurers with new costs. Seniors faced 21 percent higher Part D premiums in 2024. And to forestall even bigger premium hikes in 2025, the Biden administration engineered a bailout of insurers that will cost taxpayers billions.
While Congress ought to repeal the IRA in its entirety, such a massive legislative endeavor will take time. But for starters, lawmakers could at least make the price controls less destructive by putting all medicines on a level playing field.
Currently, the IRA subjects small-molecule drugs, which typically come in pill form, to price controls four years sooner than large-molecule biologics that must be injected or administered intravenously. This disparate treatment is stifling research into the most promising cancer treatments, which are often small molecules, and encouraging biotech firms to concentrate on large-molecule drugs that are more difficult to administer.
Fortunately, some members of Congress recognize that it makes no sense to discriminate against lifesaving treatments based on their molecular weight. So they've proposed the bipartisan EPIC Act, which would grant all drugs the same 13-year exemption period from price controls following their approval by the FDA.
The Inflation Reduction Act is an unmitigated disaster, one that's inflating Americans' pharmacy bills and insurance premiums while reducing research investments. It's up to Congress to first mitigate, and ultimately fully reverse, the damage.
Progress of medical care depends to a large scale on the introduction of pharmaceutical innovations, but these products, to be truly innovative, must address an unmet or inadequately met need and offer better health outcomes that were not previously achievable.
Dr. Wolfgang Klietmann is a former clinical pathologist and medical microbiologist at Harvard Medical School.