Commentary: For High Healthcare Costs, S.127 Is Bad Medicine

by Ann Marie Buerkle


Majority Leader Chuck Schumer is reportedly considering bringing a Big Pharma-backed bill to the Senate floor for a vote that would result in higher healthcare costs for everyday Americans. The so-called Pharmacy Benefit Manager Transparency Act (S.127) was written and pushed by special interests. If it passes, it will hurt all of us both in our wallets and in terms of the quality of our healthcare.

This legislation is designed to weaken the only free market actor in the drug supply chain that has a financial incentive to lower the cost of prescription drugs. Pharmacy Benefit Managers (PBMs) negotiate with Big Pharma on behalf of businesses, unions, and the government to lower the cost of prescription drugs. Through these negotiations, PBMs save about $1,000 in healthcare costs per person per year. It’s like going to Costco; the economies of scale make it possible for all of us to get lower prices. PBMs do that for medication.

While high drug prices concern me, as they do all of us, as a nurse and former Acting Chairwoman of the Consumer Product Safety Commission, I am even more disturbed by the negative consequences that targeting PBMs could have on health outcomes.

In addition to lowering drug prices, the other major benefit PBMs provide is through their coordination of prescriptions. They have teams of doctors and pharmacists who check to make sure prescribed medications do not, in fact, negatively impact a patient.

Through these drug utilization reviews, PBMs detect potential prescribing errors, including negative drug interactions, incorrect dosages, or other issues. In this manner, PBMs prevent nearly half a million heart failures every year.

They also notify pharmacists when it’s time for a refill so that patients can take their medications properly, as prescribed. The New England Journal of Medicine wrote, “Poor adherence to medication regimens accounts for substantial worsening of disease, death and increased health-care costs in the United States. Of all medication-related hospital admissions in the United States, 33 percent to 69 percent are due to poor medication adherence, with a resultant cost of approximately $100 billion a year.”

Naturally, Big Pharma doesn’t like PBMs because drug manufacturers don’t want to be held accountable for high drug prices and the claims they make about the efficacy of their drugs. The question is why Senators would get on board.

Well-meaning legislators understand that when it comes to healthcare, Americans prioritize cost by a wide margin. Polling shows that lowering costs for healthcare and prescription drugs beats out the second ranked priority by over 200 percent. Naturally, Senators want to do something about it. But they should not be misled by special interest groups into supporting S.127.

Big Pharma and their lobbyists have been working overtime to paint PBMs as the bad guy. In the case of medications, however, pharmaceutical companies are actually the biggest drivers of high prices, accounting for 65 percent of the net cost of every prescription. In fact, The median gross profit margin for the pharmaceutical industry is a staggering 76.5 percent.

With such huge profits at stake, it’s no surprise that Big Pharma is by far the top lobbying industry in the country. Last year, drugmakers spent nearly $375 million to influence Congress and federal agencies – over $150 million more than any other industry.

So, before supporting policies promoted by any special interest group, it’s essential to pause and think about the costs and healthcare consequences of government intervention. That’s why I posed a litmus test late last year. Don’t pass any legislation without first asking, “Does this proposal empower the private market to lower healthcare costs? If not, then let’s toss it aside.” Lawmakers should be careful not to unwittingly adopt the agenda of Big Pharma over putting patients first by lowering drug costs and improving health outcomes.

With healthcare inflation expected to jump to 9.4 percent in 2023, applying this litmus test is necessary to shield the American people from unnecessary suffering — in terms of health outcomes and in these difficult economic times.

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Ann Marie Buerkle is a former nurse and congresswoman who served as the commissioner and acting chairwoman of the Consumer Product Safety Commission. Follow on Twitter @annmbuerkle.
Photo “Pharmacist Consult” by Oregon State University. CC BY-SA 2.0.


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