The cost of prescription drugs causes millions of US residents financial hardship while damaging the health of those who cannot afford their drugs on top of the skyrocketing costs of housing, food, transportation, and other essentials. The pharmaceutical industry does produce life-saving treatments, but these are often created off the back of publicly funded research. Furthermore, the exorbitant profits that pharmaceutical companies make are based entirely on government regulations, from FDA approval to the enforcement of intellectual property rules.

The need for affordable access to all sorts of drugs is only going to escalate as the US population continues to age, compounded with the public health consequences of the climate crisis. Higher temperatures increase the prevalence and severity of an astonishing range of conditions, including “maternal-fetal health, cardiovascular disease, asthma, chronic obstructive pulmonary disease, water and food-borne infectious diseases, fungal infections, vector-borne illnesses, mental health, cancer, stroke, kidney disease, diabetes, and neurodegenerative diseases, such as Alzheimer’s disease,” virtually all of which require pharmaceutical treatment.¹

The 2022 Inflation Reduction Act (IRA) included a provision that enabled the federal government to negotiate drug prices with drug manufacturers, which reduces costs for a limited number of prescription drugs (25 in the first two years of negotiations) for people on public insurance plans and which is estimated to represent about $18 billion in savings versus what the government had previously paid.² This is a good first step, but the program must be rapidly expanded to include both more drugs and more patients by extending these publicly negotiated prices to everyone, whether they are covered by public programs, employer-based health insurance, policies from the Affordable Care Act (ACA) marketplace, or even uninsured. Expanding publicly negotiated drug prices to most drugs would save taxpayers more than $500 billion for prescriptions on Medicare/Medicaid, while extending these prices to all consumers could save households and private businesses more than $200 billion over the next decade.³

The intersection of the climate crisis and public health is alarming. As extreme weather becomes more frequent and intense, existing public health problems are amplified and new ones are created. To take just one example, climate change has contributed to a terrifying ramp-up in the scale of wildfires, with annual average acres burned almost tripling between the 1990s and 2020.⁴ Wildfire smoke and the fine particulate matter it contains is already linked to more than 24,000 deaths per year in the US, and that number is projected to rise to more than 70,000 per year by 2050 in a high-warming scenario.⁵ This smoke is particularly dangerous to people with chronic conditions like asthma and chronic obstructive pulmonary disease (COPD); these conditions can become deadly even if they are not treated pharmaceutically. Meanwhile, extreme heat is already the most deadly weather hazard in the United States; heat primarily kills by stressing the cardiovascular and renal systems, especially of those already requiring treatment.⁶ One recent estimate found that around 60 percent of US adults—almost 150 million people—are candidates for cardiovascular, renal, or metabolic medication, which would reduce some susceptibility to heath-related stresses—if those medications are affordable.⁷

US residents pay about three times more for the same prescription drugs as patients in other comparable countries.⁸ Between 2014 and 2024, drug prices rose by nearly 40 percent⁹, with total spending on prescription drugs eclipsing $800 billion in 2024—more than US residents spent that year on gasoline and residential electricity bills combined.¹⁰ Almost 70 percent of US residents take at least one prescription drug, while the number of people taking four or more prescriptions to manage multiple or complex conditions, from heart health to cancer, is rising.¹¹ Many of these conditions are exacerbated by rising temperatures and other impacts of climate change.¹² All of this is multiplied as these health conditions and high costs intersect with the increasingly urgent need to pay other bills like electricity and food prices that are soaring, in part, as a result of climate change.¹³

The pharmaceutical industry has benefited handsomely from this state of affairs while millions of US residents struggle to pay for their medicines, cut pills in half, skip doses, or forgo their prescriptions entirely. About half of US adults say they struggle to afford healthcare.¹⁴ In 2024, the 20 largest drugmakers took in nearly $900 billion;¹⁵ the pharmaceutical industry has a net profit margin of 18.5 percent, nearly twice the average of all sectors.¹⁶ Drugmakers will say that those profits are critical to developing new drugs, but data shows otherwise. Public research funding contributed to virtually every drug approved in the 2010s.¹⁷ Meanwhile, from 2016 to 2020, the top 14 drug companies spent $56 billion more on share buybacks and dividends than on research and development. Drug company executive pay rose by 14 percent over the same period.¹⁸ This situation is untenable, and more than 70 percent of those polled think that drug prices need regulation and that the government should negotiate better prices with virtually identical levels of support across partisan affiliation.¹⁹

The IRA has been hailed as a landmark climate and industrial policy because of its innovative, investment-forward approaches to driving the buildout of renewable energy. Those investments were largely repealed over the first 15 months of the second Trump administration, kneecapping the clean energy transition. However, the IRA also included provisions that overturned a 2003 prohibition on the federal government negotiating drug prices.²⁰ Trump’s One Big Beautiful Bill Act (OBBBA) weakened those provisions, but the idea of the government negotiating drug prices, along with the cost savings it offers to Medicare, is so popular that it was not fully repealed. That leaves federal negotiating authority intact, creating an opportunity to radically expand the government’s role in pharmaceutical pricing.

Congress should undertake a three-part approach that, together, would radically expand the number of drugs for which the public can negotiate price while extending those lower costs to all patients:

1. Strengthen the existing law by raising the maximum number of drugs annually negotiated under IRA authority from the current 20 to 50 (or more), while slashing the grace period for new drugs that are exempted from federal negotiations from the current seven or eleven years to three years for all drug types, speeding up how long these negotiated prices take to come into effect, and reversing the prohibition on specific types of drugs imposed by OBBBA. Negotiators should use the quintet of comparable countries’ drug costs named in the Prescription Drug Price Relief Act of 2025 as the ceiling, not the floor, of negotiations.²¹

2. Make publicly negotiated prices available to all buyers by conditioning favorable tax treatment for pharmaceutical firms while enforcing the IRA’s excise tax penalties for failure to do so. This should be combined with a federal mandate for the lowest-cost version of any given drug (or class of drug) to be placed on private insurers’ formulary list.

3. Extend the IRA’s inflation rebate to the commercial market through the same tax conditions and excise tax threat.

This slate of provisions could save households, taxpayers, and private businesses hundreds of billions over 10 years. Adjusting for inflation from a 2019 analysis, the savings to Medicare/Medicaid—less than approximately $100 billion in savings that is already realized through the IRA—amounts to potential federal savings of $480 billion and savings to households and businesses of $212 billion.²² The existing version of this plan already passed through reconciliation and all the levers are fiscal, making this proposal reconciliation-ready.

This approach would shift prescription drug pricing from a monopoly price to an administrative price like those we already have for utilities. It would shift money from pharmaceutical profits back to consumers while saving the government hundreds of billions of dollars that can be spent on further measures to improve public health, like rapidly decarbonizing our economy and communities and investing more in public research that could fill any gaps created in lost research and development funding for drug companies.

Publicly negotiated prices enjoy an amazing level of support across the political spectrum; in recent polling, KFF found that 72 percent of respondents thought there should be more regulation on the price of drugs, including substantial majorities for public price negotiation.²³ OBBBA did weaken the existing provisions by excluding a number of drugs based on the conditions they are approved to treat from negotiations, but the core of the policy stays intact. It is critical that people see and feel the benefits of these prices broadly and quickly to ensure that this constituency remains intact and will show up for similar initiatives in other sectors, especially as the world continues to warm.

Expanding public price negotiations for prescriptions and then applying them economy-wide will also necessarily build state capacity to engage in these negotiations and enforce them. The government will need more negotiators, more drug expertise, and more price surveillance capacity, the cost of which will be offset by lower Medicare spending on drugs themselves. But that is just the beginning. While publicly negotiated prices can go a long way toward improving healthcare affordability, it is ultimately important to go further, including encouraging publicly manufactured pharmaceuticals to provide generic versions of drugs that only have brand-name versions available, which could dramatically lower prices.²⁴ California is already pushing in this direction with publicly produced insulin while Thailand and Brazil have had public drugmakers since the 1970s.

Publicly negotiated prescription drug pricing is a critical intervention in its own right, and holding down the costs of life-saving drugs will only become more important as the country continues to heat up, wildfires push noxious smoke into towns and cities, and terrifying vector-borne diseases, from dengue to West Nile, spread to new areas. Every argument the pharmaceutical lobby makes against public prices—that price discipline kills innovation, or that markets know best, or that the pain is worth it, and besides, there’s no alternative—is virtually identical to those made by fossil fuel companies and monopoly utilities. These are all industries that we absolutely need to contend with while simultaneously investing in the clean energy and transportation infrastructure that builds up communities while drawing down climate pollution. Winning publicly mediated prices in a highly visible and highly popular way will make interventions on electricity rates, food prices, and price gouging more broadly all the more winnable. Building the capacity and confidence to control prices through public procurement, and extending those benefits to everyone, could have serious positive ramifications elsewhere in healthcare and beyond to other vital industries.