October 4, 2023

President Biden announced yesterday that the makers of the first 10 drugs selected for so-called Medicare price “negotiations” under the Inflation Reduction Act (IRA) have decided to participate in the program. Gerard Scimeca, Chairman of Consumer Action for a Strong Economy (CASE), issued the following statement in response to this announcement:

“While the Biden administration is desperately trying to put a positive spin on this news, doing what is politically expedient at the expense of the American public and the future of our healthcare needs. The reality is that these companies did not agree to enter into price “negotiations.” It is not a fair negotiation process when the government is threatening a brutal 95 percent excise tax penalty for those that don’t participate. What’s more, companies either have to pay this excessive fine or pull their drug from Medicare coverage entirely. Put simply, the government designed the costs for nonparticipation to be so steep that they force compliance.

“This is coercion, not negotiation. Private sector innovators are being forced into accepting government price controls for their products, and patients will ultimately feel the effect. The heavy-handed threats of price controls and punitive taxes and fines are already driving away massive amounts of private investment into new drugs and treatments. Because of the IRA, the American patients and consumers relying on cutting-edge treatments to hit the market may unfortunately be kept waiting.”