Budget Bill Eases IRA Price Controls, but Coverage Losses Will Impact Pharma

Jul 10
Jul 10, 2025

The budget reconciliation legislation making President Donald Trump’s 2017 tax cuts permanent and sharply reducing federal spending in Medicaid and the Affordable Care Act insurance market provides drug manufacturers some relief from Medicare price controls established by the Inflation Reduction Act (IRA).

Manufacturers also will benefit from the bill’s tax provisions, which include a policy allowing for immediate expensing of domestic research and development spending through 2029.
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Cathy Kelly

Cathy is a senior writer with Pink Sheet and has covered U.S. regulation and reimbursement policy for the biopharma industry since 2004, starting with the establishment of the Medicare Part D program. Since then, she has written extensively about developments in all major sectors of the U.S. insurance market (Medicare, Medicaid and commercial plans). She has covered key legislation affecting biopharma, including the Medicare Prescription Drug, Improvement, and Modernization Act which created Part D, health care reform under President Obama, and the Inflation Reduction Act. She has closely followed the increasing influence of pharmacy benefit managers and their use of formulary negotiations and rebates to control pricing. Cathy also has covered developments in health technology assessments and has monitored industry progress on novel drug contracting that reflects value-based pricing.