The Inflation Reduction Act won’t reduce health inequities

The Inflation Reduction Act won’t reduce health inequities

Last month, Congress passed the $750 billion Inflation Reduction Act.[1] The sweeping spending package addresses a wide range of important issues, from climate change to the rising cost of health care. But while it contains a number of smart reforms, the legislation unfortunately falls short in many ways when it comes to reducing health inequities.

First, consider some of the wins. The legislation caps what Medicare beneficiaries must pay out-of-pocket for prescription drugs at $2,000 per year. It limits what Medicare enrollees with diabetes must pay for insulin at $35 each month. And it extends the expanded Affordable Care Act subsidies enacted as part of last year’s Covid-19 relief package for another three years.[2]

But other policies within the IRA — such as a requirement that Medicare officials set prices for prescription drugs and a financial penalty for any manufacturer that raises a medication’s price faster than inflation — will inadvertently set back the fight for health equity.[3] Those provisions may lead to some short-term savings for the government, but they will have long-term consequences for vulnerable patients.

Knowing that the government could one day artificially and forcibly lower the price of a medication or punish a company for raising prices, biotech investors will hesitate to pour billions of dollars into the search for new treatments. The result will be fewer treatments for cancer, sickle cell, and other chronic diseases that disproportionately impact patients of color.[4]

It’s also unclear whether those patients will actually realize substantial savings from the drug pricing provisions of the legislation. According to the Congressional Budget Office, the policies will save the government more than $200 billion over a decade.[5] But much of it will be redirected to other policy priorities, rather than flowing to patients.

In fact, patients with private insurance, rather than Medicare, could actually end up paying more for insurance premiums and prescription drugs as a result of the bill. Artificially slashing the price of medications could threaten the viability of lower-priced generic drugs, leading to less competition and higher drug prices.[6]

Saving patients money and advancing health equity shouldn’t be mutually exclusive. Legislators must take meaningful action to accomplish both goals.

They can start by ensuring every stakeholder in the healthcare industry — from the opaque middlemen who inflate the cost of medications to the hospitals that issue surprise medical bills — are held responsible for their actions that exacerbate health inequalities.[7] [8]

Lawmakers can also enact policies that bolster maternal health care, further expand insurance coverage for vulnerable Americans, and support the innovation ecosystem that underpins the development of lifesaving drugs.[9]

Doing so would go a long way toward reducing inflated prices in the healthcare market and achieving health equity. We look forward to working with Congress to make progress on both of those fronts.







[5] ($100 billion + $101 billion)


[7] pg. 4-5