The Inflation Reduction Act Is Hitting Medicare, Seniors, and Medical Research

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The 2025 jump in premiums offset and exceed any reduction in drug costs that the Democrats were attempting to sell. The IRA focus insurers to cover what patients used to pay and are raising drug premiums to compensate.

Medical Research Takes a Hit

The IRA’s impact extends beyond Medicare. Pharmaceutical companies have slashed research and development budgets due to the act’s drug price controls.

Charles River Laboratories, a leading research contractor, highlighted this in its recent earnings report. CEO James Foster described the situation as “profound cuts” reflecting a “rapid deterioration” of pharmaceutical companies’ business models.

“A lot of these decisions have been taken relatively recently, and more are likely to come,” Foster added.

Some speculate that drug makers may be hedging investments due to the Democrats’ likelihood of retaining the White House, creating further uncertainty in the industry.

Drug Makers and Medicare Face Challenges

The IRA’s Medicare provisions include provisions for government “negotiation” of drug prices—although critics argue that this is closer to coercion. According to a Wall Street Journal editorial, manufacturers that refuse to comply face excise taxes starting at 186% and climbing to 1,900% of a drug’s daily revenue.