President Joe Biden’s term will end on January 20, 2025, when a new president is inaugurated. He ended his decades-long political career last month when he announced he would not seek re-election. Biden has pledged his support to his running mate, Kamala Harris, in the November election.
Soon after, the compliments started pouring in. Many of them focused on Biden’s health record. “He was promoted in no small part to his health care plan,” Axios said. As vice president, he launched the Cancer Moonshot, a project to revolutionize treatment and end the disease as we know it. He continued that effort throughout his presidency, making campaign promises to expand Obamacare and use federal power to lower prescription drug prices.
That’s a series of mistakes – nothing to celebrate. His efforts to repeal Obamacare cost taxpayers billions without doing anything to lower insurance costs. His price controls are already stifling drug innovation – and will therefore undermine his Cancer Moonshot goal of ending cancer as we know it.
The best thing for America’s future would be if Biden’s version of health care reform leaves office with him.
Biden made headlines in 2010 when he was caught on a hot mic telling President Barack Obama that the Affordable Care Act was a “big f***ing deal.” He made sure to confirm the eponymous law of his former boss, boasting that 8 million people have signed up to provide information on the Obamacare exchange during his term.
But registration has only increased because the Biden administration is paying people more money to register. In 2021, Biden signed the American Savings Plan Act into law, which included $34 billion in new subsidies for exchange enrollees. The following year, the Affordable Care Act provided an additional $64 billion in subsidies through 2025.
Without those subsidies, many Americans would not be able to afford the exchange at all. Because of the Affordable Care Act’s costly provisions, average individual market policy premiums have more than doubled since those mandates went into effect — from $232 in 2013 to $477 this year .
In addition, as the Paragon Health Institute found, under the expanded subsidy regime, nearly 5 million Americans receive more dollars than they should. Taxpayers have funded $20 billion in fraudulent Obamacare this year alone.
Damaged and ineffective subsidies were only half of the Affordable Care Act’s health care reform program. Another, a provision that gives Medicare the ability to adjust prices for an increasing number of brand-name drugs, could be even more dangerous.
Price controls on ten Part D drugs will go into effect on January 1, 2026. Fifteen more will be subject to price controls in 2027, another 15 under Part B or Part D in 2028, and 20 each year in 2029 and beyond. Biden says these price controls help seniors pay for their prescriptions.
But that price control will only save the government money. And any short-term gains will be greatly offset by long-term declines in drug development.
It costs about 3 billion dollars, on average, to develop one new drug. When the government sets prices, investors know they will not be able to get back the money they invested in research and development. So, they moved their capital to another place.
To make matters worse, the IRA imposes price controls on some drugs sooner than others. Biologic drugs – medicines made from living organisms – are only eligible for price controls after 13 years. But small molecule drugs, mostly pharmaceuticals, will be eligible for price controls after nine years only in the market.
This difference has led companies to cancel research on small molecule makers. These drugs treat everything from high cholesterol to cancer and Alzheimer’s.
IRA price controls can also prevent generic drug makers from entering the market when a brand name drug goes off patent. Why invest in bringing a competitive product to market if the government already controls the price of the incumbent?
Generics are as much as 85% cheaper than their brand-name competitors and account for nine out of 10 refills in the United States. By discouraging generic competition, IRA price controls can make seniors less expensive over time.
President Biden said last year: “In my youth, health care is a right and not a privilege in this country.” It would be more accurate to say that on his watch, health care became more expensive, and life insurance became more irrational.
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