Fiscal Tax Blog

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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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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…

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How Vertical Integration—and AARP—Are Driving Up Your Drug Costs

Every year, millions of patients pay their health insurance premiums, trusting their insurer will be there to support them if something happens. What they don’t know is that the same company they’re depending on is pocketing their premiums and taking a cut of their prescription payments. For the tens of millions of Americans enrolled in UnitedHealthcare plans, their prescriptions are being routed through UnitedHealth’s own pharmacy benefit manager (PBM), OptumRx, generating billions in financial windfall.…

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Medicare’s Drug-Pricing Proposal Carries A Hidden Cost

The Trump administration says it wants to accelerate medical innovation. Yet one new proposal from the Centers for Medicare and Medicaid Services could do just the opposite. The agency has proposed a seemingly technical expansion of Medicare’s prescription drug price control scheme, which was created by the Inflation Reduction Act of 2022. CMS wants to treat certain newer medicines as though they were the same product as older ones when determining when they become eligible for government price controls.…

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Trump Fixes a Biden Medicare Trick

The IRA, which Democrats passed on a partisan vote in 2022, let Medicare officials engage in putative negotiations with drug makers. These were de facto price controls, since the penalty for rejecting the government’s “offer” was a 1,900% excise tax on the drug’s daily sales. The law also required drug makers to pay the government rebates on medicines prescribed to seniors if their prices increase faster than inflation. Democrats claimed the “savings” from these two…

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Sen. Tim Sheehy introduces bill to fight foreign drug price manipulation, target Germany’s “freeloading”

Sen. Tim Sheehy (R., Mont.) is introducing legislation Wednesday aimed at ending the practice of foreign governments forcing American patients to shoulder the cost of developing new medicines while paying artificially low prices themselves. The Washington Reporter has learned that Sheehy’s “Use Sovereignty to Reduce Rx Act”, or USTRx Act, would establish a new pharmaceutical trade negotiator at the Office of the U.S. Trade Representative, require annual reports exposing foreign drug pricing abuses, and create a framework…