Fiscal Tax Blog

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It’s Time To Stop Wealthy Nations Freeloading on US Medicines

For over a year, German officials have obstructed one of the Trump administration’s most important reform initiatives. And the president’s patience just ran out. The White House has repeatedly asked allied countries to roll back their price controls on prescription drugs. If those nations started paying market prices for medicines invented and manufactured in the United States, it would relieve the pressure on American patients, employers, and taxpayers—who are currently forced to fund a disproportionate…

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Biden-Era Law That Created Medicare Drug Price Controls Could Hike Up Prices, Analysts Warn

Medicare’s drug price controls could restrict Americans’ ability to access care and potentially drive up costs in the long term, according to analysts. The Inflation Reduction Act (IRA), signed into law by then-President Joe Biden in August 2022, authorized the U.S. federal government to negotiate prices for certain high-cost prescription drugs covered by Medicare through the Medicare Drug Price Negotiation Program. While congressional Democrats previously claimed the IRA would help bring down healthcare prices, analysts warned the Daily Caller News Foundation that such price controls might limit…

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States Should Not Wait Until 2028 to Open PBMs’ Books

Prescription drug prices do not become opaque by accident. They become opaque because the middlemen who manage drug benefits are allowed to hide many of their revenue streams from the employers, insurers, pharmacies, and patients who ultimately pay the bill. Congress has already recognized the problem. Federal pharmacy benefit manager (PBM) reporting requirements are scheduled to reshape what PBMs must disclose, but many of the most important provisions will not take effect until 2028. That delay creates…

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Competition, Not Price Controls, Cut Drug Costs

Here’s one sign the affordability crisis isn’t what it used to be. You’ve probably seen the headlines. Big win here for Trump, but also for free market competition. The Trump Administration has aggressively promoted direct-to-consumer sales and included PBM reforms in the Big Beautiful Bill. Team Trump has attracted a half trillion dollars in new biopharmaceutical investment to the US. Intense market competition is driving down the price of medicines, such as popular weight loss…

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America Should Reward— Not Penalize—Better Medicines

Some of medicine’s most consequential breakthroughs occur years after a treatment first reaches patients. Researchers discover that a medicine developed for one disease can also attack another—or that it can be reformulated and administered in a way that is safer, faster and far more convenient. These advances aren’t accidents. They require enormous investments in scientific research, clinical trials, manufacturing and regulatory approval. Developing a new use or improved formulation can take years of additional work and…

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Biden’s Supposed Savings Adds More to National Debt

Four years ago, when former President Joe Biden was hocking his Inflation Reduction Act (IRA) — a misnomer if there ever was one — he and his fellow Democrats reassured the public that the law would reduce healthcare costs. Changes that would allow Medicare to negotiate drug prices, end drug rebates, and amend Medicare Part D benefits, they said, would produce $129 billion in taxpayer savings — a big chunk of the $290 billion of…

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Medicare’s Drug Price Controls Could Actually Raise Prices In The Long Run

Four years ago, on August 16, President Biden signed the Inflation Reduction Act into law. Lawmakers promised that letting Medicare set drug prices would save taxpayers more than $100 billion over a decade. New research suggests the IRA may accomplish the opposite in the long run. A study by University of Chicago economist Tomas Philipson and his colleagues estimates that the law’s price controls could raise average lifetime prices for the first 25 medicines selected for price-setting by 19%. How is that…

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How Price Controls Could Drive Up Long-Term Drug Spending

It’s been four years, nearly to the day [August 12, 2022], since Congress passed the Inflation Reduction Act (IRA) on a party-line vote. The bill accomplished Democrats’ longstanding goal of allowing Medicare officials to “negotiate” the price of prescription drugs. At the time, liberal lawmakers claimed these price negotiations would save the federal government more than $100 billion over the next 10 years, with the savings compounding in subsequent decades. Their math was — and…