OPINION:
Washington often gives policies promising names that obscure their real-world consequences.
When most Americans hear the phrase “maximum fair price,” they probably assume it means lower costs and a better deal for patients. Yet buried inside the Inflation Reduction Act is a drug pricing policy that could do the opposite: threatening access to community-based cancer care and discouraging the development of future treatments.
The Inflation Reduction Act, which was President Biden’s signature “accomplishment,” is chock-full of bad policies, including a shift from “average sales price” reimbursement to maximum fair price reimbursement for physician-administered drugs, such as chemotherapy.
Calling something a “fair price” does not make it so. In reality, the Inflation Reduction Act allows the government to impose price controls on innovative medicines and slash payments to independent physician practices.
If we truly want to improve innovation and access to medicines, Congress would be wise to abandon this folly and let the free market flourish.
Consider what the Inflation Reduction Act means for oncology. Community oncology practices across the country purchase highly complex cancer drugs up front, store them on site and administer them directly to patients.
Like small businesses, independent oncology practices operate on narrow margins and assume significant financial risk when supplying these expensive medications.
Maximum-fair-price-based reimbursement threatens that model. According to Milliman, reimbursement to oncology practices could be cut by more than $25 billion over the next 10 years. Across all specialties, physicians face $56.3 billion in cuts.
These losses come on top of years of Medicare Physician Fee Schedule cuts that have hit independent practices hard and have accelerated a nationwide physician shortage.
Combined, these pressures could devastate small, independent clinics, leading some practices to stop offering certain medications or even close their doors. If that happens, patients will be forced to seek higher-cost hospital care.
This Biden-era policy has expanded beyond the federal government and into the states. States such as Nevada, Virginia and Illinois have attempted to implement a flawed maximum-fair-price-based reimbursement cap, modeled on the Inflation Reduction Act, on certain prescription drugs.
Although the proposals have ultimately failed, the Inflation Reduction Act has set a troubling precedent that Democrats are still pushing in statehouses nationwide.
Further, these drug pricing rules affect more than just current treatments. Evidence suggests that the Inflation Reduction Act is discouraging investment in research and development. A 2025 study published in the Journal of Therapeutic Innovation & Regulatory Science found that, after the Inflation Reduction Act passed, the average number of industry-sponsored post-marketing trials declined by 38.4%.
Maximum-fair-price-based reimbursement could further limit research and development of new and innovative therapies. Innovators depend on community providers to enroll patients in their clinical trials. If community oncologists are eliminated from the innovation equation, investment in future drug development will inevitably decline.
We cannot continue to follow this troubled path. We must improve access and affordability today while maintaining incentives to innovate for tomorrow.
The Protecting Patient Access to Cancer and Complex Therapies Act (H.R. 4299) offers a promising and cost-effective solution. Rather than forcing physician practices to absorb the gap between average-sales-price-based and maximum-fair-price-based reimbursement, H.R. 4299 would require manufacturers to rebate the difference directly to the federal government.
Estimates suggest that the bill would generate substantial cost savings for patients and taxpayers. According to projections, patients would save $93.3 billion in cost-sharing, while the Medicare program would save $71.3 billion over 10 years.
Ultimately, policymakers should not force patients, physicians and independent community practices to shoulder the unintended consequences of federal drug pricing policies. Patients deserve access to lower-cost care, and physicians deserve a reimbursement system that allows them to deliver it.
H.R. 4299 strikes that balance, and Congress should act before more independent practices are pushed to the brink.
• Wayne Winegarden, Ph.D., is a senior fellow in business and economics and director of the Center for Medical Economics and Innovation at the Pacific Research Institute.
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