August 9, 2022
CNN recently published an article on the Inflation Reduction Act, which would empower the government to bring down prices on pharmaceutical drugs, featuring Rena Conti, Associate Professor of Markets, Public Policy, & Law.
Earlier versions of the bill initially set out to encompass both Medicare and private insurance, but the Senate parliamentarian decided that extending group negotiating power to private insurance pools didn’t align with reconciliation rules. With this decision, many health experts fear that drug makers will turn to these private markets to make up for their losses, a practice known as cost-shifting. Rena, however, argues that, “The inflation cap and Medicare’s ability to negotiate the prices of certain drugs, another one of the bill’s provisions, would make the prices Medicare pays more transparent.”
Rena also describes this idea of cost-shifting, and how the bill could negatively affect children and adults with expensive medications with little competition, as companies may try to raise these costs.