No. of Recommendations: 1
President Joe Biden's Inflation Reduction Act, which passed in a party-line vote last year, gave Medicare the power to directly hash out drug prices with manufacturers for the first time in the federal program's nearly 60-year history. The agreed-upon prices for the first round of drugs are scheduled to go into effect in 2026.
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Labeling Biden's effort as "Succeeded" is premature. Merck, BM Squibb, and Abvie have filed three different lawsuits challenging Biden's program under the 1st and 5th Amendments and these will certainly go all the way to the Supreme Court to be resolved.
Then, even if SCOTUS rejects Big Pharma and lets the program stand, the program includes this,
The companies face severe financial penalties that are several times higher than their drug's daily revenues if they do not enter the negotiations and comply with the program's conditions. Drug makers can avoid the taxes only if they pull their drugs out of Medicare and Medicaid rebate programs.
So the result of Biden's success could result in one or more of these drugs being unavailable under Medicare.
And even if the drugs remain available at a new lower price, what's to stop Big Pharma from raising prices on other drugs to make up some or all of the lost revenue.
Personally, I would like to see drug prices come down, but praising Biden for doing it is pre-mature.
