Business Group on Health: IRA’s Medicare Prescription Drug Provisions Create ‘Extraordinary’ Risk for U.S. Employees and Their Families

WASHINGTON, D.C., August 9, 2022In response to the Senate’s action on the Inflation Reduction Act’s unprecedented Medicare prescription drug provisions, Business Group on Health issued the following statement:

The Senate’s passage of the Inflation Reduction Act, which now heads to the House, creates extraordinary risk for American employees and their families, most of whom receive health and prescription drug coverage through employer-sponsored plans.

While Congress and the federal government can summarily act to reduce expenses to Medicare, which is beneficial solely to Medicare beneficiaries, the IRA’s provisions provide no support for private market solutions or protections for employer plans. We are alarmed that employer plan cross-subsidization will be expected once again to shoulder additional costs and make up for any perceived shortfall in prescription revenues by drug manufacturers. We believe this Medicare provision risks unfairly burdening employer plans and working families and are concerned with its enactment.

While pharmaceutical cost containment and sustainability are priorities for employers and other coverage providers, we believe that transparency, market-based reforms and other policy approaches would best serve all stakeholders. We therefore encourage employer plan sponsors to work with their service providers early to ensure fair treatment in light of the government’s action and potential cost-shifting.

About Business Group on Health

Business Group on Health is the leading non-profit organization representing large employers’ perspectives on optimizing workforce strategy through innovative health, benefits and well-being solutions and on health policy issues. The Business Group keeps its membership informed of leading-edge thinking and action on health care cost and delivery, financing, affordability and experience with the health care system. Business Group members include 72 Fortune 100 companies as well as large public-sector employers, who collectively provide health and well-being programs for more than 60 million individuals in 200 countries. For more information, visit