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Conservative Groups' Open Letter to Congress on Inflation Reduction Act

Dear Speaker Mike Johnson and Leader Mitch McConnell:

President Biden's Inflation Reduction Act has been an across-the-board failure. The law arguably made inflation worse by wasting billions on progressive boondoggles such as "Green New Deal" tax credits that benefit China, electric vehicle giveaways, and bigger handouts to insurance companies and affluent families who enroll in Obamacare. The law imposed costly new taxes on U.S. businesses that employ millions of Americans.

The IRA also raided $300 billion from Medicare to fund President Biden's progressive wish list. At a time when millions of seniors across the country are struggling, cutting Medicare for current and near retirees is the last thing we should be doing. Savings in Medicare should be used for Medicare reform, to extend the life of the program and avoid a costly taxpayer bailout. It should not be a slush fund for the Left.

Democrats claimed that their changes to Medicare would give Americans some much-needed relief at the pharmacy counter, but all signs suggest that the law is making it much harder for patients to access life-saving drugs. Two-thirds of Americans say this failed law hasn't helped them at all, and it's easy to see why.

The law permits government bureaucrats to impose price controls on certain medicines covered under Medicare. This provision was billed as a gift to America's seniors, but it is precisely the opposite.

The IRA has done little to deliver the savings seniors were promised; it has actually led to higher costs. Monthly premiums for Medicare Part D prescription drug plans have risen sharply since the IRA became law. According to the Kaiser Family Foundation, premiums for Medicare prescription drug plans spiked 21 percent in the year after passage of the

law. The Council for Affordable Health Coverage estimates that number could skyrocket another 50 percent or more next year. At the same time, the number of Part D plans seniors can choose from has fallen dramatically.

Remember, the stated goal of the IRA was to make prescription medicines cheaper for seniors. Instead, Biden and Democrats in Congress managed to make monthly premiums for prescription drug coverage more expensive.

As if this wasn't enough, the IRA also created a $3 billion new federal bureaucracy that will allow more government interference in decisions that should be between patients and their doctors.

History shows that price controls never achieve their stated ends and the IRA's price controls are further evidence. Basic economics dictates that imposing price controls on one class of products will simply force manufacturers to stop producing or investing in those products. This, in turn, leads to scarcity of the price-controlled product.

This isn't theoretical. Patients in countries that allow drug price controls consistently lack access to novel medicines. More than half of new drugs approved from 2018 to 2022 were launched first in the United States, according to a recent analysis from the RAND Corporation. Patients living in other countries routinely have to wait an additional year to access newly approved medicines.

Another recent study found that patients on public insurance plans in the United States have access to 85% of new drugs approved from 2012 to 2021. In Germany, the United Kingdom, and France, publicly insured patients have access to 61%, 48%, and 43% of new drugs, respectively.

The lack of drug price controls in the United States is a major reason we've become the world's pharmaceutical leader. As many as two-thirds of new medicines originate in the United States.

The drug pricing provisions in the IRA are in no way a "negotiation." In a true negotiation, both parties have the ability to walk away from the table. But companies that do not comply with the IRA's price controls have to pay up to a 95% tax on the gross sales of the medicine in question. The 95% tax creates using a similar mechanism to impose price controls on any consumer product on a whim. Nationalizing entire industries is what socialist dictatorships do, not America.

Instead of hiring more bureaucrats to set up a new price control board, Congress should work to lower Medicare premiums, increase plan choices, and require insurers and pharmacy benefit managers to share discounts, rebates, and savings with patients. It's also time that lawmakers take a hard look at foreign countries who are buying U.S.-developed medicines for pennies on the dollar. American patients shouldn't be subsiding the rest of the world's access to medicines.

For all these reasons and more, we welcome the opportunity to work with you to enact meaningful, market-based reforms that work for all Americans.

Sincerely,

Charles Sauer James Edwards

Market Institute Conservatives for Property Rights

Ryan Ellis Ashley Baker

Center for a Free Economy Committee for Justice

Brent Gardner John Goodman

Americans for Prosperity Goodman Institute

Grover Norquist Annettee Meeks

Americans for Tax Reform Freedom Foundation of Minnesota

Pete Sepp Seton Motley

National Taxpayers Union Limited Government

Saulius "Saul" Anuzis Gerard Scimeca

American Association for Senior Citizens CASE

James Martin Tom Hebert

60 Plus Open Competition Center

Grace-Marie Turner Christopher G. Sheeron

Galen Institute Action for Health

Karren Kerrigan

Small Business and Entrepreneurship Council

David Williams Paul Teller

Taxpayers Protection Alliance Advancing American Freedom

Jeffrey Mazzella C. Preston Noell

Center for Individual Freedom Tradition, Family, Property

Dick Patten Charles Moran

American Defense Business Council Log Cabin Republicans

Kent Kaiser Dee Stewart

Trade Alliance to Promote Prosperity Center for Innovation and Free Enterprise

Patrick Brenner Steve Moore

Southwest Public Policy Institute Unleash Prosperity Now

Tom Schatz Matt Dean

Citizens Against Government Waste Heartland Institute

Bob Carlstrom Ryan Walker

AMAC Action Heritage Action

Tony Zagotta Phil Kerpen

Center for American Principles American Commitment

Paul Gessing Ed Martin

Rio Grande Foundation Phyllis Schlafly Eagles

Casy Given

Young Voices

Elizabeth Hicks

Consumer Choice Center

Carrie Lukas

Independent Women's Forum

Thomas Bradbury

CPAC

Sally Pipes, Wayne Winegarden, P.h.D

Pacific Research Institute

Andrew Langer

Coalition Against Socialized Medicine

 

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