Guest opinion: Will Big Pharma giveaway increase Utahns’ health care costs?
In the lame duck period before the new administration, Congress is scrambling to pass regulations on pharmacy benefit managers (PBMs). Pressure is rising from within Utah as influencers are urging Sen. Mike Lee and incoming Sen. John Curtis to act against them.
But this pressure is not organic. The opinions of these well-meaning influencers are being shaped by a high-priced, misleading corporate lobbying campaign financed by Big Pharma. Their goal is simple: to increase drug prices and blame it on the very entities fighting to lower them. Utah’s political leaders must exercise the independent thought they are so famous for and resist the lobbyists.
PBMs are groups that Utah’s employers hire to go head-to-head against the drugmakers at the prescription drug pricing negotiating table. In some television and YouTube advertisements, Big Pharma — which pays for the ads — has painted these PBM groups as the devil, suggesting that they are increasing the cost of your prescription drugs. But, in reality, these cost-saving groups save the average person $1,000 a year. The only reason the drugmakers are saying differently is because they hate the pressure PBMs put on their bottom lines. They want to see Congress regulate them away — that way, they have free rein to charge whatever they please.
That is bad news for Utahns. More than half of them have already struggled with health care affordability over the past year, and 4 in 10 have delayed a doctor visit purely due to cost concerns.
The National Community Pharmacists Association (NCPA) is behind this movement to regulate PBMs, pushing well-meaning pharmacists to look elsewhere than the drug wholesalers and manufacturers who are really responsible for the rapid increase in drug prices.
The NCPA has a cozy relationship with Big Pharma, receiving significant annual donations from drug wholesalers who distribute more than 90% of the pharmaceutical drugs in this country. These drug wholesalers are under investigation by 49 state attorneys general for an alleged price-fixing scheme. Utah Attorney General Sean Reyes also settled a suit with them for fueling our state’s opioid crisis. But the NCPA, while pointing fingers at PBMs, has given these same corrupt pharmaceutical companies a free pass, all while granting each of them a spot on the board of their Innovation Center.
While Big Pharma might not like it, the evidence is clear that PBMs lower costs for patients. The National Bureau of Economic Research found that PBMs negotiate almost $150 billion in discounts each year. In its annual audit, the Department of Labor inspector general found that its workers’ compensation program may have paid more than $320 million in excess costs between the years 2015 and 2022 because it did not have a “pharmacy benefit manager to help contain costs.”
President Joe Biden, who was once the top congressional recipient of donation dollars from Big Pharma, is unsurprisingly going after PBMs even in his last months. His administration’s Federal Trade Commission has launched a lawsuit against PBMs accusing them of being the ones inflating drug prices, while the president himself has raked in millions from Big Pharma over the course of his career. It would be laughable if it wasn’t such a serious situation for the everyday Utahns paying more for the life-saving medication they need.
It’s not like there is any mystery about what would happen if PBMs are punished. States that have restricted PBMs, like West Virginia did for their Medicaid program, found that costs per prescription increased by 12.5%. All of this would happen at a national scale if some in Congress get their way.
Instead of going after PBMs, Utah’s political leaders should look at the source and regulate Big Pharma’s price gouging. These drugmakers continue to increase the price of their products above the general inflation rate. Make them answer some hard questions and put an end to this practice.
Outgoing Utah Sen. Mitt Romney previously voted against a bill to regulate PBMs. Here’s hoping that Sen. Lee and soon-to-be-Sen. Curtis do the same and tackle Big Pharma’s abuse instead. There’s too much at stake to give Big Pharma another crony giveaway at their constituents’ expense.
Jackson Cho is president of the Federalist Society’s Brigham Young Chapter in Provo.