Biden Admin to impose ‘inflation penalty’ on drugmakers
The Biden administration has announced an “inflation penalty” on 64 prescription drugs to help ease the cost burden on inflation-stricken seniors.
Starting in July, drugmakers will be required to pay inflation rebates to Medicare recipients as part of a program negotiated under the Inflation Reduction Act.
The program enforces a penalty each time drug prices grow faster than inflation. According to the White House, 64 medications have crossed that threshold since the program started.
By the Biden administration's estimates, the inflation rebates could help up to 750,000 Medicare recipients save money—with some patients saving up to $4,593 per day.
“Without the Inflation Reduction Act, seniors were completely exposed to Big Pharma’s price hikes. Not anymore,” said the White House’s domestic policy adviser, Neera Tanden.
The list of drugs covered includes Pfizer’s lymphoma cancer treatment Adectris, Astellas Pharma and Pfizer’s bladder cancer treatment Padcev, and Bristol Myers Squibb’s Abecma, which treats myeloma.
Although lower drug prices have become a cornerstone of President Biden's reelection campaign, he has come under intense scrutiny for his handling of inflation.
Experts say that America’s frustration with inflation could end up costing Biden the election.
Biden Admin in the hot seat
Rightly or wrongly, a growing percentage of Americans blame the current government for the historic rise in inflation.
According to a recent FT-Michigan Ross poll, 80% of potential voters said high consumers prices are one of their biggest financial challenges.
Meanwhile, 46% of adults in a Monmouth University poll said they’re struggling to remain where they are financially largely because of inflation.
Under Biden’s leadership, the U.S. Consumer Price Index (CPI) rose from 1.4% to a 40-year peak of 9.1% in mid-2022, forcing the Fed to raise interest rates 11 times.
Now, Americans are paying much higher interest rates on credit cards, mortgages, and personal lines of credit.
Although inflation has moderated to 3.3% as of May, it remains well above the Fed’s 2% target.
Republican members of the Senate Committee on Banking, Housing, and Urban Affairs say the Biden administration’s spending has fueled inflation and “economic pain.”
By the same logic, former President Trump wasn't much of a help, either.
According to a new report by the Committee for a Responsible Federal Budget, Trump added a staggering $8.4 trillion to the national debt during his term.
Former Treasury Secretary Larry Summers and many other economists think a second Trump term could be ”very inflationary" because of Trump’s proposed blanket tariffs.