The Center for Innovation and Free Enterprise opposes the recently introduced Strengthening Medicare and Reducing Taxpayers (SMART) Prices Act. This bill aims to expand on the price controls established in the IRA (Inflation Rebate Agreement) and raises concerns about the potential impact on the healthcare system. The SMART Prices Act is a step toward socialized medicine. It introduces measures like a national formulary and altered drug pricing structures. Further, it removes non-interference, including the prohibition on creating a national formulary. A national formulary refers to a standardized list of approved drugs that would be available to all Medicare beneficiaries. This will limit patient choice and lead to a one-size-fits-all approach to healthcare.
The SMART Prices Act also proposes increasing the number of drugs subject to price controls, with plans to reach 20 drugs in 2026 and 40 drugs in 2027, this is a significant increase compared to the current 10 under the IRA. This combined with accelerating the eligibility of Part B drugs to 2027 will impact access to certain medications for Medicare beneficiaries. Additionally, the bill effectively ends the exclusion of drugs with generics or biosimilars from price control regulations after just three years. This shorter exclusivity period is even more significant when compared to the existing five-and-a-half-year exclusivity for small molecule drugs, particularly if additional pediatric exclusivity is granted.
By expanding price controls and removing certain restrictions, we are one step closer toward socialized medicine. It is essential for policymakers and stakeholders to carefully evaluate the potential consequences of such legislation to strike a balance between affordable access to medications and fostering innovation in the healthcare industry.