In case you missed it, Casey Mulligan, Ph.D., professor of economics at the University of Chicago, member of the National Bureau of Economic Research (NBER), and former Chief Economist of the White House Council of Economic Advisers, testified before the U.S. Senate Committee on Commerce, Science, and Transportation during a hearing Thursday on S. 127.
In his testimony and in material submitted for the record, Dr. Mulligan highlighted how this legislation would undermine pharmacy benefits, increase prescription drug costs for patients, taxpayers, and employers, and “disproportionately burden” small businesses — all while benefiting the drug companies who set prescription drug prices.
“The regulations generally disproportionately burden the small businesses,” Dr. Mulligan said during the hearing. Pharmacy benefit companies “want lower prices and better utilization, and you’re undermining that activity and so drug prices will go up. I estimate just the pharmacy part alone could add to premiums about $10 billion a year in aggregate.”
“Easily $10 billion a year to the federal deficit, maybe $40 billion a year, maybe more,” Dr. Mulligan continued, discussing the cost impact to just the federal government.
Mulligan also underscored that the legislation would reward big drug companies with higher profits.
“The winners are the manufacturers,” Dr. Mulligan said. “There’ll be less competition among manufacturers like Big Pharma and the pharmacy companies.”
Senator Ted Cruz (R-TX) asked Dr. Mulligan to confirm if “this bill benefits Big Pharma and allows them to make more money?”
Mulligan responded, “Yes – and the report I put in the record has a numerical estimate to that effect.”
The report referenced by Dr. Mulligan estimates that disclosure requirements could impose tens of billions of dollars in annual net costs by discouraging competition among drug companies, among pharmacies, and among PBMs. Ten billion dollars, and perhaps much more, would be added to the annual federal deficit by the PBM Transparency Act of 2023.
Read PCMA’s statement on the hearing HERE.
Learn more about public policy solutions that would promote competition in the prescription drug market and effectively lower prices for patients HERE.