Coalition Letter to End IRA Prescription Drug Price Controls

In a letter addressed to Congress, and organized by Competitive Enterprise Institute, the undersigned organizations express their strong concerns regarding the Inflation Reduction Act (IRA), particularly its provisions related to prescription drug price controls. The coalition argues that the IRA’s prescription drug price control regime is unnecessary, as it focuses on list prices, while the actual net prices, after discounts and rebates, have remained relatively stable. Additionally, the letter highlights that prescription drug expenditures in the U.S. are a lower percentage of overall healthcare expenditures compared to other developed countries.

The IRA establishes a new drug price negotiation program run by the Department of Health and Human Services (HHS), enabling HHS to set drug prices and impose penalties on companies that do not comply. The letter contends that this scheme is deeply problematic, as it may lead to arbitrary actions and due process concerns. It also penalizes manufacturers based on list prices, which tend to increase faster than net prices, potentially harming both patients and innovation. The letter concludes by urging Congress to repeal the prescription drug price controls in the IRA or, at the very least, conduct rigorous oversight and mitigate the potential negative impacts of these controls.

Read the full letter below or download it here.