As Congress returns to Washington, the CEO of Big Pharma’s trade association once again celebrated the enactment of new PBM laws. The industry called the policies in the Consolidated Appropriations Act (CAA), including transparency requirements and a 100% rebate pass-through mandate, “big recent wins.”
It’s no surprise why Big Pharma is spiking the football – they are set to be more powerful than ever with the implementation of new mandates that limit employer choice and restrict proven cost-cutting tools that benefit patients. As economist Tony LoSasso recently wrote in Fortune:
“The law transforms PBMs… and weakens the tools they use to discipline drug prices. Targeting PBMs is easier than confronting the suppliers who ultimately set prices. But in markets where prices are negotiated, weakening the intermediary often strengthens the firms on the other side of the table.”
Even more concerning for patients, the law will lead to higher drug costs and worsen the affordability crisis facing so many American families and seniors. LoSasso adds:
“All participants in the prescription drug supply chain deserve scrutiny, but weakening the mechanisms that extract price concessions will not lower drug spending. The more likely outcomes are gains for drug companies and less efficient pharmacies, and higher drug costs. Effects will be especially felt by seniors on Medicare and by smaller employers that lack the leverage to offset the law’s new constraints… Lower drug prices require bargaining power. Congress has just reduced it. Patients and taxpayers will bear the cost.”
PBMs have evolved over the past several years and offer a wide range of innovative cost-savings and clinical services to the patients and employers they serve. Now that PBM reform has been achieved, Congress should stop Big Pharma from blocking lower-cost medicines and end their gaming of the patent system. More competition in the drug market will lower costs for everyone. It’s time for lawmakers to deliver the relief that Americans deserve.
