Healthcare Economics Through the Inflation Reduction Act of 2022 and Beyond

Americans, on average, pay the highest prescription drug prices in the world and are struggling to afford the medications they need. Nearly 30% of adults report not taking their medicines (https://www.grassley.senate.gov/news/news-releases/grassley-colleagues-encourage-biden-administration-to-support-safe-importation-of-prescription-drugs-from-canada) as prescribed because of the cost. Expanding access to safe and affordable drugs in Canada can make a difference the millions of Americans

The narrow margins between both political parties have made almost all legislative initiatives either an overwhelming bipartisan effort or a nail-biting count won on a party-line vote. The August 2022 passage of the Inflation Reduction Act (https://www.congress.gov/bill/117th-congress/house-bill/5376/text) (IRA; H.R. 5376) fell into the latter category, with U.S. House of Representatives Democrats requiring a deciding majority vote from Vice President Kamala Harris to reach 51 before President Joe Biden signed it into law.

How the IRA Lowers Cost of Care

The latest law is the third that two different administrations implemented to jump start the economy and protect the public during the COVID-19 pandemic. First came the Coronavirus Aid, Relief, and Economic Security Act of 2020 and the Coronavirus Response and Consolidated Appropriations Act of 2021, which provided (https://www.congress.gov/bill/116th-congress/senate-bill/3548/cosponsors) emergency assistance and health care for individuals, families, and businesses affected by the pandemic; then, the American Rescue Plan Act of 2021 strengthened the healthcare workforce (https://www.congress.gov/bill/117th-congress/house-bill/1319/text) and funded additional opportunities to confront COVID-19.

Initially dubbed Build Back Better (https://www.whitehouse.gov/build-back-better/) (BBB) by the Biden-Harris administration, the IRA:

• Allows the federal government to negotiate prescription drug prices
• Ties the costs of prescription drug pricing to the rate of inflation
• Lowers prescription drug prices specifically for older adults

During the contentious 2022 midterm election season, BBB’s politics and price tag were too steep for many U.S. senators to swallow, and sponsors had to break the bill into smaller sections for it to pass. Legislation that specifically lowered the costs of prescription medications already had bipartisan support from U.S. Senators Maria Cantwell (D-WA) and Chuck Grassley (R-IA), who previously introduced the Prescription Pricing for the People Act of 2021 (https://www.congress.gov/bill/117th-congress/senate-bill/1388) to “report about anticompetitive practices and other trends within the pharmaceutical supply chain that may impact the cost of prescription drugs” and encourage more transparency in the supply chain.

BBB died before it gained any traction, but its demise drove Biden and the U.S. Congress to collaborate on compromise language that might pass. During the August 2022 White House ceremony where he signed IRA into law, Biden harkened promises to lower prescription drug costs during his first years in the U.S. Senate and how they were finally delivered with the new legislation.

“We’re giving Medicare the power to negotiate those prices now, on some drugs,” Biden said (https://www.whitehouse.gov/briefing-room/speeches-remarks/2022/08/16/remarks-by-president-biden-at-signing-of-h-r-5376-the-inflation-reduction-act-of-2022/). “This means seniors are going to pay less for their prescription drugs while we’re changing circumstances for people on Medicare by putting a cap of $2,000 a year on their prescription drug costs. That means if you’re on Medicare, you’ll never have to pay more than $2,000 a year, no matter how many prescriptions you have, whether it’s for cancer or any other disease.”

IRA Is One Part of the Affordable Care Puzzle

Although the IRA is a historic piece of legislation in its scope, more work needs to be done to expand its provisions to more populations and types of health care. In focus groups across party affiliations, Americans still say they are overwhelmingly concerned (https://www.kff.org/health-costs/poll-finding/public-opinion-on-prescription-drugs-and-their-prices/) about the costs of health care on their family’s finances. They want to see their representatives work together to solve issues that have direct impact on their access to affordable treatments and cares. Survey results indicate (https://www.kff.org/health-costs/poll-finding/public-opinion-on-prescription-drugs-and-their-prices/) that large majorities want the U.S. Congress to find remedies to health care’s barriers, including (https://www.kff.org/health-costs/poll-finding/kff-health-tracking-poll-march-2022/):

• Increasing government funding for access to mental health services and training for mental health providers
• Making it easier for generic drugs to come to market
• Limiting how much drug companies can increase the price for prescription drugs each year to no more than the rate of inflation
• Allowing the government to negotiate with drug companies to get a lower price on drugs for both Medicare and private insurance
• Increasing taxes for drug companies that refuse to negotiate drug prices or whose prices are too high

ONS Perspective

As the U.S. Congress settles into its 118th session, it might be able to find consensus under the guise of creating mechanisms for affordable health care. The IRA is just the first step in the opening salvo of a conversation that encompasses the entire political ideologic spectrum. Few issues resonate with policymakers as much as prescription medication costs.

Oncology nurses are patient-centered cancer educators who are driven to help make care accessible to all. Nurses must use their passion and educational skills to lend their expertise to the discussion and ensure that patients are put first in high-quality healthcare management.