Drug prices have increased considerably under the Biden administration, according to Bureau of Labor Statistics (BLS) data.
The average price of prescription drugs in America’s cities has increased by roughly 7% between January 2021, when President Joe Biden took office, and May 2024, BLS data shows. Drug costs are up despite the president repeatedly touting that he is bringing down the price of medication through the Inflation Reduction Act (IRA) and other policy mechanisms.
“We brought down the price of prescription drugs, which is a major issue for many people,” Biden said at Thursday night’s presidential debate in Atlanta. “No senior has to pay more than $200 for any drug, all the drugs they can include beginning next year.”
The IRA includes provisions that allow the Centers for Medicare and Medicaid Services (CMS) to negotiate the prices of certain drugs covered under the program with pharmaceutical companies. Since the federal government can hit drug manufacturers with a steep excise tax for not accepting negotiated prices, some experts have criticized the mechanism as a price control that could cause drug companies to raise prices elsewhere to make up losses.
“The Inflation Reduction Act finally gives Medicare the power to negotiate to lower drug prices,” the president said on X in December 2023
“What I did, when, for example, he wants to get away with — and get rid of the ability of Medicare to — for the ability to — for the — us to be able to negotiate drug prices with big pharma companies,” Biden said at Thursday’s debate, appearing to argue that Trump would roll back Medicare negotiations.
Moreover, the Biden administration has instituted an automatic rebate policy that triggers if the prices of drugs covered under Medicare Part B increase faster than inflation, a move experts think could raise overall costs.
“The rebate policy in Medicare is going to incentivize drug manufacturers to increase the prices of medications for people in private health insurance,” Robert Moffit, senior research fellow at the Center for Health and Welfare Policy at the Heritage Foundation, previously told the Daily Caller News Foundation. “The impact on Medicare, the big impact, will be that the combo of the rebate policy and the price control regime is going to mean that for Medicare beneficiaries, their health insurance premiums through Part D and Part C are going to be lower.”
The Biden administration’s potentially costly tweaks to healthcare extend beyond the IRA, with the Departments of Health and Human Services, Labor and the Treasury unveiling a rule in March that restricted access to short-term health insurance plans. The rule changed the definition of short-term limited-duration insurance (STLDI) plans such that they could only cover three-month periods, with the potential for a one-month extension, down from the previous definition that allowed the plans to stretch between 12 and 36 months.
“The rule will drive some people to the ObamaCare Exchanges, which appears to be the purpose of inflicting all this harm,” Michael Cannon, director of health policy studies at the Cato Institute, previously told the DCNF.
STLDI plans typically offer lower premiums and stronger provider networks than Affordable Care Act plans, Brian Blase, president of Paragon Health Institute, told the DCNF previously. Short-term insurance plans like these are common among self-employed workers and independent contractors.
“The winners are the private health insurance companies that sell ObamaCare plans,” Cannon said. “They met with the administration in May 2023 and urged the administration to terminate short-term plans after four months … the Biden administration is quite literally terminating coverage for sick patients in order to enrich private insurance companies.”
The White House did not immediately respond to the DCNF’s request for comment.
Featured image credit: (Screen Capture/PBS NewsHour)
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