Arizonans Deserve to Know How the $740 Billion ‘Climate Bill’ Will Threaten Prescription Drug Access and Affordability

Dubbed a “climate” bill and officially named the “Inflation Reduction Act of 2022,” congressional Democrats’ $740 billion reconciliation package is rapidly—and quietly—making its way through Congress. But few have read the fine print. And that is unfortunate because, if enacted, it would prioritize a progressive climate agenda over Arizona families and the state’s economy.

Before this stealth proposal receives a vote—which could come as early as this weekend—Arizonans should have the opportunity to learn about and publicly debate the legislation. Are their interests best served by $370 billion in new climate spending? Will spending hundreds of billions of taxpayer dollars do anything to ease the burden of inflation on Arizona families?

But reading the fine print buried deep within the 725-page bill reveals that it also threatens to stunt medical innovation, drive drug prices higher, and leave older Americans who rely on Medicare with fewer treatment options.

Under the proposal, ten to twenty of the highest-spending drugs used in the Medicare program would be selected for “negotiation” every year. If a drug maker does not enter into a price agreement, they would be hit with a 95 percent penalty on sales.

It’s not hard to imagine how a drug manufacturer might limit the availability of a treatment in the Medicare program to avoid making the “top ten to twenty” highest-spending drugs. This would hurt the countless older Americans who need these drugs to effectively manage chronic illness.

Price control schemes limit manufacturers’ ability or incentive to innovate. While they’re peddled as a way of “saving money,” they have the easily predictable unintended consequences of stifling new drug development and limiting patients’ access to the newest, most innovative treatments.

Another provision in the bill would cap drug price increases. This week, the non-partisan Congressional Budget Office (CBO) concluded that this provision would encourage drug makers to increase prices on new drugs knowing that their ability to do so would be limited once their product is on the market.

There is no doubt that cost of prescription drugs is a concern for Americans. But this bill fails to discern cost from value, while also ignoring how these treatments might be serving to reduce hospitalizations, halt illness progression, and improve overall patient overall. This short-sighted approach threatens to undermine the rapid pace of drug development that is providing enormous benefits to patients and society.

More than one-third of the state’s population is over age 50. Arizonans, especially those who will be immediately affected or could be in the coming years, deserve to know about the details of the bill’s many health-related provisions and publicly debate whether this proposal serves their needs and preferences.

Not only will this package impose extraordinary new taxes on some of the state’s most innovative manufacturers, but it also comes at a time of rising economic uncertainty and frighteningly rapid price increases for necessities like groceries, gasoline, and rent.

This proposal is a perilous prescription for Arizona’s businesses, families, and older residents whose healthcare options may be limited as a result. Arizonans deserve better.

Naomi Lopez is the Vice President for Healthcare Policy at the Goldwater Institute.