On Thursday, the Biden administration marked the second anniversary of the passage of the so-called Inflation (Reduction) Act (IRA) by announcing the results of the first round of “negotiations” between Medicare and pharmaceutical manufacturers. According to the announcement, Medicare will save an estimated $6 billion on the selected prescription drugs in 2026, when the price controls take effect, with seniors saving another $1.5 billion in out-of-pocket costs.
But as with many things in Washington, things aren’t what they appear. For starters, these “negotiations” were conducted on anything but a level playing field. As noted previously, these “negotiations” included a maximum price the government must pay — meaning price controls — with companies that do not want to participate in this rigged process facing the option of taxes of up to 1,900 percent of the revenue of the products in question or dropping out of the Medicare and Medicaid programs entirely.
To put it bluntly, “the program represents a ‘negotiation’ in the same way a robber ‘negotiates’ with employees at the bank.” Other elements of this process to establish socialist-style price controls make it far less ideal than advertised.
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As noted, the administration claimed Medicare will save money from the “negotiations.” But where will that money go? Not to seniors, that’s for sure.
According to the Congressional Budget Office, the IRA cut Medicare spending by a net $254.8 billion. That money didn’t go back into Medicare but instead funded other programs created
