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 still is — wildly off. As my University of Chicago colleagues and I show in a new paper, the IRA’s price controls will likely increase long-term prices of medicines.