Editor’s Note: The following is testimony delivered by Erin Trish to the U.S. House Oversight and Government Reform Subcommittee on Economic Growth, Energy Policy, and Regulatory Affairs and Subcommittee on Health Care and Financial Services on May 20, 2025. More information about the hearing can be found here.
Key Points:
- Biomedical innovation is an American success story, but the drug pricing provisions as implemented under the Inflation Reduction Act (IRA) threaten continued therapeutic advances. The evidence is clear that reducing expected revenues, for example, through drug price “negotiation,” reduces the number of new drugs entering the market and is likely to shorten life expectancy.
- The IRA includes particularly concerning provisions that undermine progress in treating rare disease and disincentivize investment in small molecule drugs.
- The implementation of the IRA’s inflation rebate provisions encourages higher launch prices, discourages studies of real-world efficacy, hinders negotiations with private payers, and generally decouples drug prices from real-world value.
- Part D benefit redesign was needed to restore competition in the market, and patients benefit from the insurance protection provided by the new out-of-pocket cap. But early implementation has distorted the market and increased taxpayer subsidies from approximately 75% of base spending historically to 83% in 2025.
Full testimony is available here.
