Transparency Mandate Would Give Drugmakers Key Information to Raise Prices

(Washington, D.C.) — A new Moran Company study examining the budgetary impact of S. 637, “Creating Transparency to Have Drug Rebates Unlocked (C-THRU) Act,” introduced by Senator Ron Wyden (D-OR), projects that the legislation would increase federal spending by $20 billion over 10 years.

The report — “Assessing the Budgetary Implications of Increasing Transparency of Prices in the Pharmaceutical Sector— suggests that so-called “transparency” policies included in the bill would result in more access to pricing information for competing drug manufacturers, which the Congressional Budget Office has often suggested would lead to higher prices, particularly in Medicare Part D. The study was released today by the Pharmaceutical Care Management Association (PCMA).

“What consumers want is transparency of premiums, copays and other costs that help them make better choices,” said PCMA President and CEO Mark Merritt. “Unfortunately, this bill would grant drug companies inside information that would empower them to raise prices for consumers.”

The study asserts that CBO “could reasonably conclude that the effect on branded drug pricing could be as great as 2 percent over time.”

Numerous reports by the FTC have also found that the wrong kind of transparency will raise costs by giving drug companies and drugstores unprecedented pricing power that could help them tacitly collude with their competitors. PBMs typically reduce prescription drug costs by 30 percent by using their scale and expertise to negotiate discounts from competing drug companies and drugstores and by encouraging consumers to use the most cost-effective drugs.