In March, President Biden spoke in Nevada about the need to reduce drug prices.
The president is right: As things stand, Nevadans have experienced the highest increase in healthcare costs in the nation over the past three decades. A recent survey conducted by Altarum Health found that nearly one in three living here have experienced hardship due to high healthcare costs.
The CDC reported earlier this month around 9 million people nationwide are not taking their prescriptions, or are taking lower dosages, due to high cost. Many of these people are our neighbors right here in the Silver State, making decisions between their prescriptions and paying rent or putting gas in their car to get to work.
Unfortunately, however, in the three months since President Biden’s Nevada speech, some members of Congress have taken Big Pharma’s advice on how to “reduce” drug prices. They have done so by introducing a series of bills to regulate pharmacy benefit managers (PBMs), which would only inflate the cost of prescription drugs even higher if passed.
If Big Pharma is the healthcare industry’s equivalent of Lex Luther, PBMs, the groups health plans pay to manage their healthcare programs, are Superman. While the drug companies continue exploring ways to increase drug prices, PBMs use their leverage to disapprovingly wave their finger, saying “not so fast.”
PBMs negotiate rebates and bulk pricing discounts with Big Pharma, thereby ensuring that insurance companies, health plans, and corporations can offer affordable medications to their beneficiaries, or at least ensuring that said medications are more affordable than they otherwise would have been if Big Pharma was left alone.
A recent study from renowned economist Casey Mulligan, the former chair of President Trump Council of Economic Advisers who now works at the National Bureau of Economic Research, found that PBMs save us approximately $145 billion on an annual basis.
The Government Accountability Office and the Congressional Budget Office have also corroborated that PBMs save us money. A GAO study from 2016 showed that they helped offset Medicare Part D spending by 20%, while the CBO has identified PBMs as crucial healthcare actors that help limit costs.
It’s understandable why Big Pharma doesn’t like these groups: they’re reducing drug prices!
By contrast, the dominant drug wholesalers in the U.S., namely Cardinal Health Inc., AmerisourceBergen Corp., and McKesson Corp., wield power in the opposite direction. Controlling over 90% of the drug supply, these three behemoths, each boasting a net worth of over $20 billion, can inflate the prices on our pharmaceutical shelves at will.
But while these three companies are currently under investigation by 49 state attorneys general for alleged price-fixing, PBMs are serving as the shining lights fighting for everyday citizens. Congress regulating them would be the equivalent of tying their arms and legs in chains.
Big Pharma would love that, but Main Street wouldn’t. We all know that the road to affordable healthcare is complex and challenging. Misdirected efforts toward regulating PBMs, who have proven their worth in reigning in drug costs, risks exacerbating the situation rather than solving it. For Nevadans who have borne the brunt of surging healthcare costs, this is a risk they cannot afford. It’s the actual “bad guys”, Big Pharma and the major drug wholesalers, who should be the focus of congressional scrutiny so the healthcare industry can ultimately provide affordable and accessible drugs for all.
Here’s hoping Senators Catherine Cortez Masto and Jacky Rosen recognize as much.
- OPINION: Nevada Can’t Afford to Do Big Pharma’s Bidding - July 21, 2023