Dr. Tom Price: In infrastructure push, Congress is throwing patients under the bus

As Congress attempts to pass an over-the-top infrastructure package that will cost taxpayers hundreds of billions, if not trillions, of dollars, members are digging through the proverbial couch cushions to help bring down the cost. Delaying an executive action taken during the previous administration known as the rebate rule is on the list. Proponents argue that pushing back the rule’s implementation date by three years will save Uncle Sam $49 billion.   

The newfound fiscal responsibility of Congress is welcome but should raise eyebrows considering its track record. No one spends other people’s money more quickly than Washington after all. The multi-trillion dollar spending boondoggle during the pandemic is a prime example. So the question is what’s the trade-off?   

Short answer: patient wallets.  

While the federal government could negate a fraction of the infrastructure spending by throwing the rebate rule out the window, patients struggling to afford rising prescription drug costs will get the short end of the stick. I guess Congress is crossing its fingers and hoping no one will notice?  

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Medicine costs in the U.S. have gone through the roof in recent years. Since 2000, spending on pharmaceuticals has nearly tripled. Currently, prescription drugs account for about 10 percent of all healthcare expenditures annually, which amounts to hundreds of billions of dollars. It’s a kitchen table problem that should be a priority for policymakers, but has instead taken a back seat.   

A complex web of middlemen called Pharmacy Benefit Managers (PBMs) are contributing to these jacked-up prices. While these entities initially performed a valuable service in exchange for fair compensation, they are now gaming the system. 

Acting as gatekeepers between drug manufacturers and the patient market, PBMs are able to pocket tens of billions of dollars annually from the drug supply chain. The PBM sleight of hand erases financial discounts provided by drug companies alongside its products before it’s realized by consumers at the point of sale.  

In 2018, PBMs leached $166 billion from the system that should have at least partially gone to patients as savings. It’s behavior that would be considered highway robbery in any other setting.   

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The previous administration attempted to tackle these middlemen by unveiling the very rebate rule that Congress now wants to delay.   

Once implemented, the policy would force financial savings and discounts already provided by drug manufacturers to be passed along to patients at the pharmacy counter. Although the standard would be limited to medicine accessed through Medicare Part D, the structural accounting change would have a ripple effect on drug prices across the board.    

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The Biden administration already delayed the rule’s implementation once in an effort to preserve the status quo—a move that was unsurprisingly celebrated by the PBM lobby. And now Congress is looking to extend the middleman scheme for even longer.   

Efforts to balance spending with taxpayer revenue in Washington are refreshing and a trend that I hope continues. However, lawmakers should be careful not to throw patients under the bus while doing it.