How Will Drug Prices Be Affected By the Inflation Reduction Act?
Summary from the AllSides News Team
President Joe Biden is on track to sign the Inflation Reduction Act into law next week, which includes several provisions that empower Medicare to negotiate drug prices with pharmaceutical companies.
The pharmaceutical industry, which spent over $142 million on lobbying efforts to combat the Democrats' legislation, will be required to cap out-of-pocket prescription costs for seniors and people with disabilities enrolled in Medicare at $2,000 a year. The U.S. Department of Health and Human Services (HHS) will also begin negotiating prices for the top 10 medications by total Medicare expenditures in 2026, rising to 20 in 2029.
Other key revisions include removing co-pay costs for vaccines and restricting drug price increases to the rate of inflation. Pharmaceutical companies that don't comply with the new drug pricing measures will be subject to a 95% sales tax.
Outlets across the spectrum noted that the Inflation Reduction Act represents a "rare" defeat for the pharmaceutical industry. Some reports highlighted how Biden's reconciliation bill wouldn't cover the insulin co-pay cap for the seven million patients with private insurance.
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