As healthcare access and costs continue to dominate political conversations, the flaws in the Inflation Reduction Act are becoming increasingly clear and worrisome.
Proponents of the IRA claim the law has and will reduce health care costs for America’s seniors, but the reality is much different. Instead, the policies in the IRA have not only led to fewer jobs and reduced investment in new medicines, they have also led to skyrocketing premiums in Medicare Part D while failing to address the driving force behind out-of-pocket costs patients face.
Lost Jobs
The last two years have coincided with thousands of layoffs across the country, including in biopharma hotbeds in California, Massachusetts and beyond. According to Fierce Biotech’s tracker, the industry endured a 57% jump in total layoffs among biotech companies from 2022 to 2023, and the trend doesn’t appear likely to reverse in 2024.
Reduced Innovation
Then there is the IRA’s small molecule “pill penalty.” By creating a four-year disparity in market exclusivity between new small molecule medicines (9 years) and biologics (13 years), lawmakers have hand-picked winners and losers in medicine and discouraged investments and continued research in the treatments that are most common and convenient for those in need.
Skyrocketing Premiums and a Taxpayer Funded Insurance Bailout
Another concerning development is emerging during this election season. Proponents of the IRA have highlighted the $2,000 cap on patients’ out-of-pocket costs that will start in 2025 as a major benefit – particularly for seniors with chronic conditions and continuous treatment needs.
But that money won’t just disappear.
Monthly premiums for many Medicare Part D plans are poised to skyrocket – again – despite the current administration attempts to mask the burdensome increases. That prompted the Centers for Medicare and Medicaid to roll out a “demonstration project” to delay realization of the significant hikes and deflect criticism before the election in November – in other words, a multi-billion-dollar bailout of insurance companies. Regardless of tactics, American seniors and taxpayers will suffer from these changes in many ways – including at the pharmacy counter, with unmet future treatment needs, and in their wallets.
These examples are just a few that illustrate the IRA’s shortcomings across the health care landscape – and its failure to address the structural challenges actually driving up costs for patients. We Work For Health continues to advocate for policymakers to pursue fixes to the IRA’s unintended consequences and prioritize patient-centric pathways for innovation and the delivery of lifesaving and life-enhancing care.