CASE Sends Letter to Senate Urging Examination
of the IRA’s Harmful Effects on Americans’ Healthcare
September 17, 2024
Chairman Wyden, Ranking Member Crapo, and Members of the Senate Finance Committee:
Consumer Action for a Strong Economy (CASE) writes today to represent the interests of millions of U.S. consumers before your committee to express serious concerns about the true impact of the Inflation Reduction Act (IRA) on American consumers.
CASE has voiced opposition to the IRA from the beginning, and a major focus of our criticisms has been on the law’s negative downstream consequences for patients. The Medicare “negotiations” on prescription drug prices, a centerpiece of the IRA’s healthcare provisions, are nothing more than government-imposed price controls. If drugmakers refuse to accept the government’s price mandates, they face a crippling excise tax that could amount to 1,900 percent of a drug’s daily revenue – hardly a fair negotiation.
As usual, consumers inevitably pay the price for government price manipulation. Patients with rare diseases especially depend on specialized medications and cutting-edge therapies that require significant investment in research and development (R&D). Unfortunately, companies today are having to reduce investment in R&D and even cancel projectsas a result of the IRA’s price controls. By stifling this innovation, the IRA is limiting the future cures and treatments that could save countless lives.
To make matters worse, Medicare beneficiaries are also seeing fewer options and higher costs when it comes to their Part D plans. Medicare Part D standalone plan premiums increased 21 percent from 2023 to 2024, and the average plan bid amount is up 179 percent for 2025, from $64.28 in 2024 to $179.45. This startling increase is set to drive up premiums for beneficiaries even further. At the same time, the IRA raided $260 billion in Medicare savings to fund unrelated initiatives like electric vehicle subsidies, green energy projects, and payouts to big insurers. Instead of using these resources to strengthen Medicare and improve patient care, the administration prioritized liberal industries, leaving seniors to bear the burden.
Instead of openly addressing the problems created by the IRA, the Biden-Harris administration is using the Centers for Medicare and Medicaid’s (CMS) recently unveiled subsidy “demonstration project” to cover up their failures. The “demo project” would impose “a year-over-year increase limit of $35” for premiums while ramping up payments to insurers. Effectively, this program will take nearly $7.2 billion from Medicare over the next three years and funnel it to big insurers, slapping a band-aid on a problem that will only get worse.
CASE’s concerns about the law when it was first passed have unfortunately become a reality two years later. When it comes to cost, quality, and access, the IRA has already proven to be disastrous for American patients. Yet proponents of the law consistently sweep these problems under the rug for political gain. Lawmakers must not let this continue.
Rather than overlooking these glaring issues, members of your committee have an opportunity to tackle them head on and examine the true impacts of the IRA on Americans’ healthcare. Any discussion on the IRA that focuses narrowly on the marketed benefits does a disservice to American consumers and patients.
Sincerely,
Consumer Action for a Strong Economy (CASE)