The Coalition Against Socialized Medicine (CASM), a broad coalition of free-market advocacy groups, has formally urged President Donald J. Trump to take immediate action to delay the implementation of the Medicare Drug Price Negotiation Program under the Inflation Reduction Act (IRA). In a letter addressed to the President on January 29, 2025, CASM warned that the continuation of this program would result in significant harm to healthcare access, innovation, and the American free-market system.
A Call to Halt Government Price Controls
CASM’s letter to President Trump highlights the dangers of government-mandated drug price controls, which the coalition argues are not true negotiations but rather bureaucratically imposed price-setting mechanisms that will inevitably reduce access to life-saving medications and stifle pharmaceutical innovation. The letter states:
"Anyone who has taken an introductory economics class or studied history knows that price controls never work. They disincentivize development, lead to scarcity, and create overall losses for society."
CASM’s position is clear: delaying and ultimately repealing the IRA’s drug price control provisions is necessary to preserve America’s leadership in medical innovation and prevent further disruption to Medicare Part D beneficiaries, who are already experiencing increased premiums and fewer plan choices.
The Inflation Reduction Act’s Negative Impact
The Inflation Reduction Act, passed in 2022 without Republican support, introduced a Medicare Drug Price Negotiation Program that effectively forces pharmaceutical companies to accept government-determined prices or face a crippling 95% excise tax. While the law was billed as a measure to reduce drug costs for seniors, its actual effects have been far more damaging. According to CASM:
The IRA’s policies have already resulted in increased premiums for Medicare Part D beneficiaries—up by 21% in 2024 alone.
The number of Medicare Part D plans available to seniors has reached an all-time low, limiting options for millions of Americans.
Research and development (R&D) budgets for new drugs have been slashed as pharmaceutical companies anticipate lower returns on investment.
A report from the University of Chicago estimated that U.S. drug price controls under the IRA could result in 135 fewer new drugs over the next 20 years, as companies scale back investments in innovative treatments.
A Pattern of Failure: Lessons from the 1970s
As free-market advocates have long pointed out, price controls have a history of failure. We can draw a parallel between the IRA’s drug pricing model and the failed economic policies of the 1970s. The Carter presidency and the late 1970s were marked by ‘stagflation’— the horrific combination of both stagnant wages and inflated prices. We learned (or should have learned) that price controls do not work, but they do lead to shortages (which is why the iconic image of the 1970s is people in cars in line for gas while the stations all put out signs saying, ‘No Gas Today.')
Similarly, the IRA’s drug price controls threaten to create a scarcity of new medicines, just as past price control policies led to gas shortages. The impact of these policies extends beyond today’s market—future generations may find themselves without access to the treatments and cures that free-market competition would have otherwise made possible.
A Path Forward: Market-Based Reforms
Instead of doubling down on government intervention, CASM and other free-market advocates propose an alternative approach: promoting competition and investment to lower drug costs organically. One solution under discussion is the Ensuring Pathways to Innovative Cures (EPIC) Act, which aims to extend the exemption period for small-molecule drugs (typically pills and tablets) from price controls, allowing more time for investment and innovation.
This approach mirrors the economic strategy employed by President Ronald Reagan in the 1980s, when deregulation and market-driven reforms spurred economic growth and restored prosperity. Similarly, a repeal of the IRA’s harmful provisions could reinvigorate the pharmaceutical industry, encourage R&D, and ultimately deliver lower drug prices through competition rather than coercion.
The Time to Act Is Now
The Biden administration’s eleventh-hour expansion of the Medicare Drug Price Negotiation Program was a transparent attempt to cement its healthcare agenda before leaving office. CASM warns that allowing the IRA’s provisions to take full effect will further undermine America’s healthcare system and drive it toward a government-controlled model.
President Trump now has the opportunity to reverse course and prevent long-term damage to pharmaceutical innovation and patient access to medications. CASM’s letter urges immediate executive action before the next phase of the IRA’s implementation begins on February 1, 2025.
"Biden’s imposition of the second phase of the Medicare Drug Price Negotiation program was nothing more than a last-minute move to try and block your efforts to implement sound healthcare policy." – CASM Letter to President Trump
By acting now, the administration can send a clear signal that it prioritizes patient access, medical innovation, and free-market principles over government overreach.
Conclusion
The battle over healthcare policy is far from over, and the Inflation Reduction Act represents one of the most significant challenges to America’s free-market healthcare system in decades. As CASM and other advocates continue to push for policy changes that encourage competition and investment, it remains to be seen whether President Trump and Congress will take decisive action to dismantle the IRA’s harmful provisions.
For now, the coalition’s message is clear: halt the Inflation Reduction Act before it does irreversible damage to America’s healthcare system.
