Two years ago, the Inflation Reduction Act was passed and since then, has done little to reduce inflation but a lot to reduce innovation. CASM Director Andrew Langer breaks down how the act has especially impacted innovation and free market negotiation in the medical field.
The act attempts to implement price controls on certain drugs to bring drug prices down, but the method by which the Biden-Harris administration is trying to lower prices holds a gun to the head of pharmaceutical companies. The head of the HHS sets a price for a certain drug and threatens companies that don’t comply with a 95% tax.
Unfortunately, the worst of the consequences of this method do not hurt pharmaceutical companies but are passed on to every day Americans. The Biden-Harris approach interrupts the free market cycle which limits profitability for companies and discourages medical research. As a result, treatment options will shrink and prices will actually rise.
Langer summed up, “Innovation comes when someone decides that they want to build a better mouse trap. So, the world will be a pathway to their door, but if there’s no reason for the world to be a pathway to their door, if they can’t recoup that investment, why would they invest in the future?” He added, “Nothing is ever as expensive as when the government tries to make it less expensive.”
Watch Langer’s full commentary on CPAC+.
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