Chris
Stansbury | Posted: Mar 30, 2021 12:01 AM
The opinions expressed by columnists are their
own and do not necessarily represent the views of Townhall.com.
The latest
$1.9 trillion stimulus package that was passed and signed into law includes a
policy that will directly temper rising healthcare costs for some Americans.
The provision, supported by
President Biden, caps the proportion of income Americans can be charged for
health insurance premiums through the Obamacare exchanges. The unintended
consequences of injecting more government into healthcare are well documented
and should trigger skepticism, but the goal of taming runaway prices is
laudable. Americans currently pay some of the highest medical
costs in the world.
Rather than
applying even more government controls to the system, Biden and Congress would
be better advised to return the decision-making power back to individuals.
Putting patients back into the driver’s seat will give them more control over
their healthcare dollars and allow them to purchase personalized care at a more
affordable price. Uncle Sam shouldn’t have the power to dictate what specific
provisions are included in a health plan. Healthcare is a personal product that
should remain between a patient and their doctor.
Controlling
health plan prices, however, is only one piece of the puzzle. The prices of
prescription drugs in the U.S. have been ballooning for decades. Last year,
U.S. residents paid more than $360 billion for
pharmaceuticals—triple what was paid in 2000. Americans should expect to pay a
premium in order to have access to the most innovative treatments in the world,
but we crossed the acceptable threshold long ago. A cloaked network of
middlemen known as Pharmacy Benefit Managers, or PBMs, are largely to blame.
The
middlemen act as the gatekeepers between drug manufacturers and the consumer
market. PBMs use their considerable leverage to force pharmaceutical companies
into providing discounts and rebates alongside their products. The savings,
which amounted to $166 billion in
2018, are pocketed by PBMs and partially passed along to insurance companies.
In short,
PBMs are swimming in cash as patients are left paying top shelf prices at the
pharmacy counter. Middlemen efforts to game the system are only accelerating.
As
recently reported in The
Wall Street Journal, while the price tag of drugs continues to rise for
patients at the point of sale, the companies that actually produce the products
are collecting a shrinking share of revenue. One company noted the average
retail price of their insulin products have jumped by 141 percent since 2012,
but the revenue per dose it realizes has declined by more than half over the
same period. Query: Where is that money going? The mismatch suggests middlemen
are gobbling up a bigger portion of the sales price at the expense of
consumers.
Although
Biden has made efforts elsewhere to control health-related costs for Americans,
his actions around prescription drugs are moving in the opposite direction and
helping to preserve the status quo.
During the
previous administration, then President Trump took steps to rein in the complex
system of backroom deals and kickbacks that artificially raise the price of medication.
The administration proposed a rule that would force drug discounts already
provided by manufacturers to be passed along to patients at the pharmacy
counter, rather than being intercepted by PBMs. While the action was limited to
prescriptions accessed through Medicare Part D, the structural change would
have likely lowered consumer prices across the board.
When
confronted with the rule’s implementation deadline, the Biden administration
sided with the middlemen and delayed the policy’s effective date by a year.
Considering the animosity the current White House feels towards the policies of
the previous one, it’s likely the rule will be nixed for good and never see the
light of day.
Health-related
expenditures are out of control in the U.S. and efforts to throttle excessive
patient bills should be applauded. Although Biden talks a good game around
providing Americans with more affordable healthcare, his actions thus far
around prescription drugs say otherwise. Unsurprisingly, consistency is the
last thing we should expect from a lifelong politician.
Dr. Chris Stansbury is
a West Virginia small business owner, practicing optometrist, and a member of
the Job Creators Network.
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