The federal government recently announced the actual prices on the first 10 drugs subject to price caps created by the Inflation Reduction Act (IRA) for the Medicare program. According to the Biden administration, these 10 drugs have cost Medicare approximately $50 billion, or about 20 percent of Medicare drug spending. With these price caps, the administration estimates that Medicare will save $6 billion. However, this number is very likely inflated – as many of these products currently entail significant discounts for Part D plans and other drugs will see their patents expire and costs will plummet, which the administration seems not to consider. However, what is certain is that these price caps will, within a few short years, impact 60 of the most heavily-prescribed drugs, and soon revenue losses for drug makers will be significant, causing enormous damage to the life sciences sector.

There are dire consequences that have been set into motion both near and long term from this policy, known commonly as the Medicare Drug Price Negotiation Program, especially the stifling of innovation. Price ceilings will only limit the number of medicines for Americans.

One recent study from University of Chicago........

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