HKS Affiliated Authors

Ethel Zimmerman Wiener Professor of Public Policy, HKS; Henry and Allison McCance Professor of Business Administration, HBS

Additional Authors:

  • Matthew Vogel


March 5, 2024, Paper: "The Inflation Reduction Act (IRA) of 2022 is the most significant reform to US prescription drug pricing in two decades and the first expected to result in a net reduction in Medicare drug costs. Although beneficial for today’s payers and patients, the magnitude of the law’s effect on future innovation is disputed. The Congressional Budget Office (CBO) estimated that the IRA will result in a decrease of one new drug in the first decade and an additional 12 drugs over the following two decades. An industry-sponsored study warned of a decrease of 230 drugs in the first decade alone. With the law now well into its implementation, assumption-driven forecast models should increasingly give way to contemporary empirical evidence. If the IRA is as consequential as its supporters and detractors contend, evidence of its effects may already be emerging."