The Inflation Reduction Act includes several initiatives designed to make drugs cheaper, especially for seniors and people with disabilities who are on Medicare. There’s a new cap on out-of-pocket expenses, penalties for drug makers that hike prices more quickly, and a promise of insulin for no more than $35. In addition — and most famously — the federal government now has the power to negotiate directly with manufacturers over the price of certain drugs.
These reforms are all pretty limited, at least by international standards. In countries like France, Germany and Japan, governments negotiate the prices of all drugs. We’re still a long way from that here, because the negotiating authority and most of the other associated reforms are limited to Medicare only, and, even then, to only certain kinds of drugs under certain conditions.
But Biden wants to change that too, by expanding the number of drugs eligible for negotiation and extending some of the reforms to the private sector.
If you want more details on what he’s proposing and why, you can read about it here.
Like all health care policy proposals, these have real-world tradeoffs. And their merits are subject to legitimate debate — over whether, for example, forcing down drug prices will deter investment in ways that would reduce incentives for research and development.
But the politics of these ideas are not really in doubt. Their polling numbers are off the charts, which is one reason Biden spent so much time on them tonight, and why he’s going to keep talking about them in the months to come.
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