The comically misnamed Inflation Reduction Act imposed government price controls on prescription drugs by replacing the old non-interference principal, which used market-average prices to set drug reimbursement, with a scheme that allows the Secretary of Health and Human Services to directly set prices via a sham negotiation, in which the manufacturer has to agree or face a punitive seizure via a tax equal to 95% of the product’s total sales.
A system like that undermines the return on the multi-billion-dollar investment required to develop a new drug and bring it to market, resulting in fewer new cures and treatments. It’s a mistake, and it’s hard to think of how a policy like that could be made worse. And yet the Biden administration managed to do it. They made the price control regime much worse in practice than it was on paper, and while the short-term prospects for repealing the law are dim, the Trump administration can and should take immediate actions to reverse several specific Biden blunders.