Economic Analyses Shows “Delinking” Policy Hands Big Pharma a Financial Windfall
totaling $32 Billion Annually
(Washington, D.C.) — Pharmaceutical Care Management Association (PCMA) issued the following statement on the introduction of H.R. 6283, “Delinking Revenue from Unfair Gouging Act” or the “DRUG Act,” in the U.S. House of Representatives.
“Unfortunately, H.R. 6283 is a policy championed by Big Pharma that would severely undercut the prescription drug savings achieved by pharmacy benefit companies on behalf of patients and health plan sponsors in the commercial market. The result of this bill would be a massive financial windfall to drug companies. The bill would also do nothing to lower drug prices and instead would significantly raise commercial-market health insurance premiums for consumers and increase taxpayer costs.
“The so-called “delinking” policy removes market-based incentives for pharmacy benefit companies to secure the deepest discounts on drugs, including those with extraordinarily high list prices. The evidence is overwhelming that PBM-negotiated rebates are uncorrelated with drug prices – which are set solely by drug companies. And, a growing body of research also makes it clear that PBM-negotiated rebates are passed through to employers and other health plan sponsors, who use them to lower patient cost sharing and premiums.
“This week, health policy researcher Alex Brill, founder and CEO of Matrix Global Advisors (MGA), released an analysis of “delinking” that finds imposing this drug-company backed policy in the commercial market would increase premiums by $8.4 billion–$26.6 billion and result in annual drug company revenues increasing by as much as nearly $22 billion.
“In addition, a recent analysis from University of Chicago Professor of Economics Casey Mulligan, Ph.D., published in the National Bureau of Economic Research (NBER) analyzed the economic impact of “delinking” in Medicare Part D. Dr. Mulligan also finds significant taxpayer and premium increases and concludes the policy could lead to an additional $10 billion of revenue every year for drug companies, bringing the total windfall for Big Pharma to more than $32 billion annually.
“Instead of following Big Pharma’s self-serving agenda and interfering in private market contracting, we urge Congress to examine policies and legislation that actually lower prescription drug costs for consumers, employers, and other health plans sponsors.”
PCMA is the national association representing America’s pharmacy benefit companies. Pharmacy benefit companies are working every day to secure savings, enable better health outcomes, and support access to quality prescription drug coverage for more than 275 million patients. Learn more at www.pcmanet.org