Shortly after today’s announcement from the Centers for Medicare and Medicaid Services (CMS) that another 15 prescription drugs had been selected for coercive “price negotiations” between Medicare officials and manufacturers, National Taxpayers Union (NTU) warned that taxpayers will continue to suffer, not benefit, from this process. NTU President Pete Sepp offered the following statement:
“The tragically misnamed Inflation Reduction Act of 2022 delivered many blows to taxpayers, and none will prove to be more painful than provisions that effectively allowed the federal government to dictate the prices that Medicare would pay for certain prescription medications. Far from delivering stable savings in the government-funded health program for seniors, over the long run taxpayers will suffer, as pharmaceutical development slows and with it the cures that could offset costlier surgeries, hospital stays, and other therapies. From cardiac drugs to vaccines, the use of cutting-edge medications in Medicare, Medicaid, and public employee health plans has been proven to benefit taxpayers when given the time and space to work for patients. Now, this progress is in danger. Equally disturbing, the negotiation scheme is backed by the threat of a 95% tax for companies that refuse to surrender to government pricing demands—a tax that is administratively burdensome, economically untenable, and constitutionally dubious.
Not content with the first round of so-called negotiations that deterred investment and innovation, the outgoing Administration has decided to attack a new set of drugs—including some fiscally-promising Anti-Obesity Medications. This move, in the final hours of the Joe Biden presidency, gives ominous new meaning to the term ‘midnight rulemaking.’ In this case, CMS’s decision is moving the clock on vital, pro-taxpayer drug development ever-closer to midnight, dimming hopes for bending the health care cost curve without harming patients. Congress and the new Administration must move quickly to reverse both CMS’s decision and the noxious negotiation provisions in the Inflation Reduction Act. For taxpayers, that clock is ticking.”