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Big Pharma’s latest prescription hike scheme
The first rule of health care is “do no harm,” a pledge that politicians should adopt as they seek to fix Iowa’s health care crisis.
Health care in Iowa is flatlining. Over the past decade and a half, 250 health care facilities have permanently shut their doors, with rural areas bearing the brunt of the problem. If you can access health care, you will face the stark reality of its cost. Iowa has seen health care costs rise at about triple the inflation rate.
According to recent data from the Iowa Association of Business and Industry, the cost of health care is the primary concern shared by its business members. Health care costs are projected to increase 9—10% through 2026. Meanwhile, Iowa already ranks 41 out of the 50 states on health care affordability burdens.
If politicians can read a poll. That is why they promise to take action to provide seniors with the relief they need. Problem is, their current “solution” — regulating pharmacy benefit companies, which some members of Congress are attempting to do before the year’s end, is like a rigged carnival game to benefit Big Pharma.
Pharmacy benefit companies are groups that both business and government health plans (including my business health plan) hire to negotiate with drug manufacturers for bulk-pricing discounts and to get cheaper drugs approved for use on health care plans. They also use their purchasing power to secure lower prices from drug companies.
Pharmacy benefit companies work. A 2019 study from the Government Accountability Office found that the drug price rebates they negotiated “offset Medicare Part D spending by 20%, from $145 billion to $116 billion.” However, these offsets directly threaten Big Pharma's profit margins, so drug companies are aggressively lobbying against pharmacy benefit companies.
Drugmakers are trying to convince Congress and the White House they don’t share enough of the costs they save. Data from the Government Accountability Office demonstrates otherwise. Regulating these companies would increase drug costs, not decrease them, and that’s precisely what Big Pharma wants.
Sadly, some well-intentioned political heavy-hitters in Iowa have been misled by Big Pharma’s deceptive lobbying.
In 2022, the state enacted legislation forcing PBMs to determine pricing based on a government-produced price survey. Retail pharmacists have joined forces with Big Pharma, seeking to enact additional legislation to affect the establishment of pharmacy networks.
At the federal level, Rep. Mariannette Miller-Meeks has introduced federal anti-pharmacy benefit legislation, as has Sen. Chuck Grassley. These Iowans mean well, but the result of their efforts will only embolden the drug industry.
Congress should reject these ill-advised proposals to hamstring pharmacy benefit companies.
Our politicians should strengthen existing price transparency rules on hospitals, limit Big Pharma’s ability to price-gouge in the marketplace, and stop the industry collusion that keeps our drugs unaffordable. It’s the only way we, the people, can finally get the well-deserved victory.
Jeffrey Bradford, PhD, is an Iowa-based financial and retirement strategist.
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