One thing that always amazes me is how protective some normally free-market Congressmen are of the prescription drug industry. Any legislation that reduces drug prices through promoting free market principles in the drug industry – such as those facilitating free trade, or reducing big companies’ ability to game the system (like the CREATES Act) – have been met with opposition from members of Congress who claim that the increased costs to Big Pharma hurt their ability to develop new drugs.
Of course, the easy way to address concerns about the cost of development and the price of prescription drugs is to reduce regulations and make it easier to bring new drugs to market, but until the necessary sweeping reforms to the FDA are made, preserving what free market competition there is in the pharmaceutical market is essential.
Sadly, there are still lawmakers who promote government intervention in the marketplace to protect pharmaceutical companies’ profits. Sometimes, these Representatives claim their legislation is anti-Big Pharma but will have consequences that benefit pharmaceutical special interests. Take Congressman Buddy Carter (GA-01) for example, who has recently been targeting Pharmacy Benefit Mangers (PBMs) as the cause of higher drug prices.
PBMs use the power of competition and free-market negotiations with both drug companies and pharmacies to find the lowest price for expensive pharmaceuticals and are very successful at doing so. PBMs are far from perfect—but the way to address their shortcomings is to take further steps to create a freer market in the pharmaceutical space, not to restrict a PBMs’ ability to use negotiating power on the open market to reduce the cost of drugs.
Importantly, among the clients for which PBMs work to reduce drug costs are Medicare insurance plans. At a time when Medicare is forced to draw from its reserve funds to cover current benefits, causing Medicare trustees to predict that the Medicare trust fund will be bankrupt by 2026, it is odd—to say the least—that a self-proclaimed fiscal conservative like Buddy Carter would attack a proven way of saving money.
But Representative Carter wants to burden PBMs with new regulations which—while well-intentioned – could raise the prices that customers pay for prescription drugs!
Representative Carter’s efforts could also set a precedent leading to more regulations on health care, benefiting Big Pharma and hurting consumers.
Hopefully, Congressman Carter, and others in Congress, can be persuaded by their constituents to start pursuing real free-market reforms instead of looking for more government solutions that help the special interests and hurt consumers.
If you live in Representative Carter’s district, please call him at 202-225-5831 and tell him to stop defending Big Pharma.