Congress will soon vote on a government funding bill. The version released today in the House would needlessly exacerbate the affordability challenge many Americans are facing by increasing prescription drug costs. 

For years, pharmaceutical companies have spared no expense pushing for policies that undermine the most powerful check against their pricing power: Pharmacy Benefit Managers (PBMs). The bill introduced today does drugmakers’ bidding by weakening the ability of employers to use PBMs to lower drug costs. Simply put, if the tools used by PBMs to lower drug costs are restricted, drug companies have more power to keep drug prices high.

Exhibit A: 

A proposal, backed by Sen. Bill Cassidy, to allow government intrusion in private market contracting between PBMs and their employer clients would not only weaken PBMs’ ability to lower drug costs through negotiation, but also force a one-size-fits-all pharmacy benefit for employers to offer workers. Today, employers tailor pharmacy benefits to meet the unique needs of their businesses as well as the health needs of their workforce. This would be outlawed under this bill.

Sen. Cassidy’s provision is also a classic case of a solution in search of a problem. A recent survey of nearly 700 employers from across the country, conducted by NORC at the University of Chicago, found that employers value the flexibility to design their own coverage. An overwhelming 96 percent of respondents feel confident in their organization’s ability to make decisions regarding prescription drug benefits correctly.

Key Findings from the University of Chicago employer survey:

Employers, not the government, should decide how to design health care benefits for their employees.

Exhibit B:

A policy included in the bill, known as “delinking,” will increase Medicare Part D premiums and cost taxpayers billions.

Unsurprisingly, “delinking” is a high priority for pharmaceutical companies because it will significantly boost profits.

University of Chicago Professor of Economics Casey Mulligan confirmed the policy’s consequences in a report published by the National Bureau of Economic Research (NBER).

Key Takeaways from the Mulligan report on “delinking” in Medicare:  

1. Taxpayers Pay More for Medicare: Annual federal spending on Medicare Part D premiums would increase $3 billion to $10 billion.
2. Higher Premiums for Seniors in Medicare Part D: Reducing the negotiated rebates and discounts PBMs pass to health plans to lower drug costs for patients and health plans could lead plans to raise premiums to finance drug benefits. Eliminating the pay-for-PBM-performance incentives could also reduce insurance coverage and appropriate drug utilization as costs for patients rise.
3. Financial Windfall for Big Pharma: The “delinking” policy has the potential to significantly increase drug prices, reduce drug utilization, and redistribute billions of dollars annually from patients and taxpayers to pharmacy companies and drug manufacturers. The result would be approximately an additional $10 billion every year for drug companies, while costing patients and payers up to $18 billion.

Congress should side with patients and employers — reject drugmakers’ playbook and focus on legislation that addresses the many ways pharmaceutical manufacturers artificially inflate drug prices.