Congress must resist Big Pharma’s scheme to dismantle drug cost watchdogs

The pharmaceutical industry has always had an expansive congressional wish list, but it was only recently that the insincerity of its asks became so public and glaring.

Weeks ago, the major drug companies began fighting tooth and nail against the Biden administration’s exploration of “march-in rights” — a mechanism that would effectively allow the White House to seize the patents of certain drugs it deems priced too high.

There must be enough free-thinking members of Congress willing to stop the drug companies’ regulatory aspirations.

Who can blame them? Intellectual property rights represent the cornerstone of American innovation. Without them, the U.S. health care industry will degrade into a shell of its current self. Prices will rise, consumer choice will decline, and job growth and health care access will drop dramatically. So, the drug companies have every right to argue that this government overreach is unwelcome news.

Yet, at the same time, the drug companies continue to fight in favor of other proposed regulations that conform to their financial interests.

The pharmaceutical industry is spending millions of dollars on advertisements and lobbying in hopes of convincing Congress to regulate pharmacy benefit managers — the groups that employers (both the government and private businesses), insurance companies, and others hire to negotiate pricing deals with Big Pharma.

The drugmakers must know that PBMs have a history of lowering drug costs — often, by helping health plans make greater use of the cheaper generic drugs that compete with the brand names.

In testimony to Congress, the Office of Management and Budget stated that PBMs stimulated “a very dramatic shift towards generics and away from branded drugs ... the primary explanation for why Part D in Medicare is costing a lot less than was projected initially.”

According to a 2019 Government Accountability Office study, those savings were astounding. The GAO found that PBMs helped to offset Medicare Part D spending by 20%, or $29 billion. A 2023 report from the Department of Labor’s inspector general included similarly astounding statistics about how much PBMs save health care consumers.

And yet, the drug companies continue pushing to regulate these entities.

While it may seem impossible that anyone in Congress would listen to the pharmaceutical industry following the glaring insincerity found within the reasoning behind these two regulatory priorities, the truth is that money talks in politics. Between the 2016 and 2022 election cycles, the top 10 pharmaceutical firms gave more than $50 million to members of both parties, and they have supported its legislative goals as a result.

There must be enough free-thinking members of Congress willing to stop the drug companies’ PBM regulatory aspirations. History has already shown such rules are a complete disaster for the vulnerable Americans the pharmaceutical industry professes to help. Just look at the “rebate rule” the Trump administration proposed to curtail PBMs’ negotiating leverage. The Congressional Budget Office found that, had the rule gone into effect, it would have boosted federal spending by more than $170 billion. Is this really an idea that anyone should want to resurrect?

Congress should remain committed to health care policies that stimulate competition, enhance the quality of care, and drive down costs. That means defeating Joe Biden’s march-in rights plans, but it also means ensuring that PBMs remain protected from government interference. Succumbing to the pitfalls of overregulation and other interest group-driven regulatory efforts will not benefit anyone besides the self-interested industries that are pushing the measures.