Three Republican chairmen of key committees of the House of Representatives said Wednesday that a new Congressional Budget Office (CBO) analysis confirms that the Inflation Reduction Act of 2022 added at least $700 billion to the costs to taxpayers of the Medicare Part D drug program.

“The [CBO’s] new analysis confirms what Republicans sounded the alarm on for years: The drug pricing scheme in the Inflation Reduction Act (IRA) fails to deliver the savings Democrats promised. CBO originally estimated these policies would save taxpayers $129 billion. Instead, CBO now confirms the IRA’s misguided policies were the major driver behind higher projected Part D expenditures, contributing to a $700 billion deficit increase,” House Budget Committee Chairman Jodey Arrington (R-Texas) said in a statement.

“We have once again confirmed that Democrats, with CBO’s analysis in hand, sold the American people a false bill of goods in the Inflation Reduction Act. Combined with the Joint Committee on Taxation’s $600 billion miscalculation of the cost of the Green New Deal tax credits, we now know the IRA cost Americans $1.3 trillion more in new deficit spending. Today, taxpayers are left holding the bag due to Democrats’ failed experiment in price fixing and their Green New Deal climate agenda,” Arrington said.

House Energy and Commerce Committee Chairman Brett Guthrie (R-Ky.) pointed out in the same statement that “the problematic design of the Inflation Reduction Act (IRA) has not led to the savings CBO originally projected but has instead led to increased costs for taxpayers and instability in the Part D marketplace.”

House Ways & Means Committee Chairman Jason Smith (R-Mo.) also noted that “Washington Democrats’ Inflation [Reduction] Act was yet another costly promise that failed to deliver lower prices for seniors. Democrats promised lower prescription drug prices, but the CBO is once again confirming that their policies instead increased costs for America’s seniors and taxpayers by an additional $700 billion, while offering 50% fewer drug plans for them to choose from. Plain and simple, Democrats have made it harder for seniors to afford prescription drugs.”

In a July 29, 2026 letter to the three GOP committee chairmen, CBO Director Phillip Swagel acknowledged that the congressional agency’s initial projection of reduced costs under Medicare Part D as a result of the IRA missed the mark by a substantial margin.

“The 2022 [IRA] contains three major provisions affecting prescription drug prices and coverage: drug price negotiation, which requires the Department of Health and Human Services (HHS) to negotiate prices directly with manufacturers for selected high-expenditure drugs; inflation rebates, which manufacturers must pay if increases in their drug prices outpace inflation; and a redesign of Part D to cap enrollees’ annual out-of-pocket costs, limit premium increases, and shift more financial liability to plans and manufacturers,” Swagel explained.

“In September 2022, following the enactment in August, CBO projected that enacting those provisions would lead to combined deficit reductions of $129 billion over the 2022-2031 period. At the time, CBO estimated that by 2026, the reductions in direct spending stemming from the first two provisions would more than offset increases associated with enacting the third,” Swagel continued.

“Since then, on the basis of new information, CBO has revised its projections. Evidence now indicates that the spending reductions attributable to drug price negotiation and inflation rebates have been smaller than CBO originally estimated. The costs of the Part D redesign have been significantly [higher] because of greater-than-anticipated increases in spending because of greater use of prescription drugs,” he said.

The original projection by CBO claimed passage of the IRA would result in a $99 billion reduction in the federal government’s costs under Part D thanks to the drug price negotiations and a $63 billion reduction due to the inflation rebate provision.

There would also be $3 billion in implementation costs for a total reduction of $162 billion over 10 years. But CBO expected the portion of the annual federal budget deficit that economists attribute to Medicare Part D would be $30 billion, for a net spending reduction of $129 billion.

Instead, due mostly to unexpected effects of the Biden administration’s redesign of Part D to cap enrollees’ out-of-pocket expenses, the deficit saw a $700 billion increase. The two biggest reasons CBO offered for the huge difference between projections on the IRA impact on Medicare Part D were a lack of prior analysis of how drugmakers would respond to the redesign approach implemented by the new law and unexpected growth in consumer spending on drugs, especially in the diet and weight-loss arenas.

“In its February 2026 baseline, CBO added about $700 billion to the projection of Part D outlays over the 2026-2035 period compared with the prior baseline. Roughly $550 billion of that increase reflected new information concerning the 2026 Part D bids. In CBO’s assessment, the redesign was the leading driver of those higher bids. Other contributing factors include underlying growth in spending on drugs and changes in rebates and other payments from manufacturers,” Swagel observed.

Swagel said CBO analysts have not conducted a separate impact analysis of the Part D redesign because “market-wide trends in prescription drug spending, and other factors, making it difficult to estimate the redesign’s contribution separately.”

Spokesmen for each of the ranking Democrats on the three House committees were asked for comment on the GOP chairmen’s claims about the negative impact of the Biden administration’s heavily promoted claims that the IRA would reduce government costs for Medicare Part D. None of the spokesmen had responded by deadline.

Rep. Brendan Boyle (D-Pa.) is the ranking member of the Budget panel, while Rep. Richard Neal (D-Mass.) is the ranking member of Ways and Means and Rep. Frank Pallone (D-N.J.) is the most senior Democratic member of Energy and Commerce.