The Dangers Hidden In CMS’ Drug Pricing Regulation
CMS recently announced the next 15 drugs that will be subject to price negotiations under the Inflation Reduction Act of 2022 (IRA). These are negotiations in name only because CMS can levy penalties on any manufacturer that fails to comply with the process. Since the penalties include an excise tax up to 95% of a drugs total U.S. sales revenue, the law essentially empowers CMS to set its desired prices (e.g. price controls).
Price controls discourage R&D spending. With less investment devoted toward discovering and developing new medicines, the pace of innovation will dramatically slow. Fewer breakthrough medications will reach the market harming patients who are depending on the development of these new drugs for their health and well-being.
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