One of the most important public policy discussions taking place today is about the high cost of prescription drugs. The situation has gotten out of control as patients all over the country — Nevada included — lament their inability to afford the medication they need to live. Patients are rationing their prescriptions or skipping dosages altogether because prices are too high.
Faith-based communities across Nevada have been hoping that our leaders in Washington step up and help fix this crisis. Fortunately, our prayers are starting to be answered. Congress has made a substantial effort this year in trying to combat this problem. Lawmakers on both sides of the aisle have introduced legislation that will help drive down drug prices and bring relief for patients.
But the Department of Health and Human Services (HHS) has posed a challenge in this fight. HHS has introduced the Rebate Rule, a proposal that would eliminate the ability of pharmacy benefit managers (PBMs) to negotiate rebates with pharmaceutical companies for patients covered by Medicare. This rule will cost patients and taxpayers billions of dollars with no guarantee that drug prices will be lowered. In fact, in some cases drug prices may rise even more.
You may not have heard about PBMs, but they play an important role in the prescription drug supply chain. Here’s how they work: PBMs negotiate with pharmaceutical companies on behalf of insurance providers to get discounted prices on Medicare Part D drugs. PBMs are able to save patients money through lower premiums and out-of-pocket costs. More importantly, PBMs are the only check in the supply chain — without them, drug companies would have even more leeway to charge whatever prices they want.
The Rebate Rule is a costly proposal that does more harm than good. First, it hurts our seniors and the disabled. An analysis conducted by the Centers for Medicare and Medicaid Services (CMS) found that the Rebate Rule will raise Medicare Part D premiums by 25 percent overall and 19 percent in 2020 alone.
Seniors and those with disabilities are already struggling to pay for their medications. They are among some of our state’s most vulnerable citizens and many of them are on fixed incomes. They simply cannot afford a premium increase this big.
The Rebate Rule is also unfair to taxpayers. If it is passed, CMS concluded that federal spending will increase nearly $200 billion from 2020 to 2029, which would make it one of the most expensive regulations in U.S. history.
While seniors and taxpayers get hit with a costly regulation, Big Pharma gets a bailout. CMS says that drug makers will keep some of the dollars they pay in rebates and use the rule to pad their pockets with an increased $137 billion in overall drug spending. The pharmaceutical industry is not suffering any shortage of profits. In fact, the industry enjoys some of the highest profit margins of any industry. It doesn’t make sense to increase costs for seniors and taxpayers while pharmaceutical companies reap more benefits.
PBMs are not the unnecessary middlemen that Big Pharma paints them to be. The truth is, pharmaceutical companies are the only ones responsible for setting drug prices. They could lower prices just as easily as they raise them. Instead, they keep increasing prices on the backs of vulnerable patients. Patients shouldn’t have to choose between paying for the medicine they need to live or their other basic needs.
As Christians, we are called to help those in need. While we can do what we can in our communities to help alleviate the burdens of our brothers and sisters in Christ, it’s up to Congress to enact policies that protect us. We will continue to pray that Sen. Cortez Masto does the right thing by rejecting the Rebate Rule and works with her colleagues on policies that will address the underlying issues of high drug prices: transparency and competition. With more choice and more information in the marketplace, prices will start to come down.
Jack St. Martin is a former VP of Catholic Charities of Southern NV and ex-chief of staff to past Lt. Gov. Mark Hutchison. He writes from Reno.