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The so-called Inflation Reduction Act will be one of the greatest misallocations of federal resources in American history. The bill has many moving parts, but here’s a simple way to sum up its macroeconomic impact: It would transfer about a quarter of a trillion dollars from America’s pharmaceutical industry, which saves and extends lives, to the climate-change industrial complex, which makes energy more expensive.
The former industry has produced the majority of the world’s 40 most recent wonder drugs. Covid-19 vaccines and treatments alone probably saved hundreds of thousands of lives and restored trillions in economic activity. The industry has provided life-saving and pain-reducing treatments, contributing to reductions in death rates from cancer and heart disease by half over the past 50 years. The pharmaceutical industry spends roughly $100 billion a year in research and development—on the race for the next generation of cures and treatments for Lou Gehrig’s disease, cancer, Alzheimer’s, Parkinson’s, epilepsy and other diseases.
