IRA’s Drug Pricing Provisions Face Legal Challenges
The Inflation Reduction Act of 2022, signed into law by President Joe Biden, includes provisions for Medicare to negotiate drug prices with manufacturers. However, this aspect of the law faces legal challenges, with six manufacturers and two industry groups filing lawsuits to declare the negotiations unconstitutional or unenforceable.
Despite these challenges, the public opinion of voters on both sides of the political spectrum firmly favors the drug pricing provisions.
Unpopularity Among Constituents
While some Republicans have expressed their desire to repeal the Inflation Reduction Act, their focus has primarily been on other sections of the bill, such as green energy, climate change, and IRS enforcement. The provisions to lower patient out-of-pocket spending on prescription drugs under Medicare have received less attention. However, these provisions are widely popular among the general population.
A recent national survey revealed that Americans overwhelmingly oppose the pharmaceutical industry’s lawsuits attempting to impede Medicare from negotiating lower drug prices. Furthermore, voters do not believe the argument that lower negotiated prices will result in fewer new treatments.
While it is true that the IRA’s drug price negotiations may impact investment in research and development, leading to potential declines in drug approvals, the average person on the street does not consider this argument convincing.
Public Perception of the Pharmaceutical Industry
The pharmaceutical industry’s public image has suffered, with only 18% of Americans viewing it favorably. The respondents in the survey indicated that their negative attitude towards drug firms increased upon hearing about the lawsuits.
This negative perception poses a risk for Republican incumbents and challengers in upcoming elections, as voters are more likely to side against the pharmaceutical industry due to their opposition to Medicare drug price negotiations.
Potential Consequences for the Pharmaceutical Industry
The pharmaceutical industry must evaluate whether their fight against the IRA’s drug price negotiations is worth pursuing. From a judicial perspective, last week’s rejection of a court injunction by a U.S. District Court in Ohio suggests that the court’s stance on the matter is clear. The judge ruled that participation in Medicare is voluntary, even if it is vital to a business model.
Continuing with litigation against Medicare drug price negotiations could further strain the industry’s and Congress’s relationship as constituents voice their displeasure. This is a significant concern for an industry facing public relations challenges.
Additionally, the pharmaceutical industry must consider the impact of international price referencing, as it may pose a more significant threat than any provision in the Inflation Reduction Act. Former president Donald Trump has also criticized the industry for pricing behavior, and future measures may likely be even more impactful.
The pharmaceutical industry’s legal challenges to block Medicare drug price negotiations are facing strong opposition from voters and the general public. The unpopularity of these lawsuits among constituents puts Republican candidates at electoral risk and further damages the industry’s public image.
As the judicial perspective on this matter becomes more apparent, the sector must assess whether the fight against these negotiations is worth pursuing. With the potential for more impactful measures in the future, it becomes increasingly essential for the industry to consider its public standing and the potential consequences of its actions.