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President Biden and Kamala Harris are having a big celebration to mark the second anniversary of the Inflation Reduction Act (IRA).

They won’t discuss the damage the law has done to Medicare or how it is impacting the development of new medicines.

Some Washington insiders refer to the IRA as the Green New Deal #2. Both bills are already having some negative impacts on seniors and medical technology.

It just got a lot more expensive to be sick in America. And for those that are hoping for a cure to their disease or a new drug to extend their lives, make life it just got a lot more expensive. And if you have a chronic illness you may have to give up on a breakthrough drug cure.

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Inflation Reduction Act Causes Medicare Costs to Skyrocket

When Democrats passed the Inflation Reduction Act (IRA) during their control of Washington, D.C., it set off a chain reaction leading to higher Medicare costs for senior citizens.

Ron Fitzwater, CEO of the Missouri Pharmacy Association, wrote in the Missouri Times, “Nearly two years after its passage, the IRA has diverted nearly $260 billion from the projected Medicare savings to pay for special interest handouts like large tax credits for costly electric vehicles, enormous subsidies paid to big health insurer-PBM corporations, and funding health care programs for illegal immigrants.” 

This shift began when the act transferred the burden of paying for prescription medicines from seniors to insurance companies. Predictably, insurance companies responded by increasing premiums for 2025.

“Increases were coming in at about 179 percent,” Fitzwater noted. To avoid a political fallout with voters just before the election, the Biden administration implemented a federal bailout, shifting the financial hit to taxpayers.

According to an August 12th article in Politico, the chain reaction began when the act shifted the burden of paying for prescription medicine from seniors to insurance companies.

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.

“The law also requires manufacturers to pay the government rebates on medicines sold to Medicare if they raise prices more than the rate of inflation and puts them on the hook for more of the entitlement’s Part D costs,” the editorial stated. The estimated $160 billion in savings from these measures was directed toward unrelated green energy projects under the IRA.

“But subsidized solar panels won’t help if you get sick,” the WSJ editorial warned. The inevitable result of these policies will likely be fewer new medicines and reduced innovation in the U.S. medical research sector.

A Questionable Trade-Off

Despite promises to protect Medicare and advance medical research, critics argue that the Biden-Harris administration has undermined both. Seniors face rising premiums, drug makers are cutting back on innovation, and the long-term consequences for the healthcare system remain uncertain. As Fitzwater observed, “The Biden-Harris administration is not protecting Medicare; they’re stealing from it.”