A Reuters report released just days ago uncovered that America’s leading drugmakers are raising prices yet again. Due to industry greed, the American people can expect to see more than 140 brands of drugs increase in cost over the next month.
Prior to the increase, on average, pharmaceutical costs were higher in the United States than in any other country in the world. According to Bloomberg, Americans spend about $1,300 per year on pharmaceuticals. For a year’s supply of a newly launched drug, the costs have risen to $220,000 per year, an increase of more than 20% from 2021.
The most infuriating of the announced price hikes came from Pfizer. The $167 billion company routinely receives government-guaranteed business, including $2 billion from Operation Warp Speed. It has so much money that its CEO receives an average of $17.4 million in annual bonuses. Yet, it still has the audacity to raise the prices of its products.
It is one thing when drugmakers decide to raise prices independently; however, it is quite another when they seek to use government force to help them do so. Unfortunately, that is exactly what is happening now.
In 2022, the Pharmaceutical Research Manufacturers of America (PhRMA), the trade association that represents all the major drugmakers, contributed $52 million to “political campaigns and nonprofits, patient groups, universities and other organizations.” In the first nine months of 2023, PhRMA spent $21 million on just federal lobbying, ranking as the fourth highest in the nation.
The group recently hired more lobbying firepower, YC Consulting, in an effort to convince Congress to pass regulations on pharmacy benefit managers (PBMs), entities that health plan sponsors hire to negotiate against drugmakers to keep the cost of prescriptions down.
Fortunately for consumers, PBMs are amazingly effective in keeping the cost of prescriptions as low as possible. The data shows they save each consumer an average of $1,040 annually.
Because of this successful track record, Seema Verma, the Trump Administration CMS Administrator, said she is very thankful that the federal government uses PBMs to lower prescription drug costs. Unfortunately, pharmaceutical companies are not very enthused by the successful record of PBMs. This is why they are desperately trying to neutralize the effectiveness of PBMs through regulation.
Hopefully, this situation is tailor-made for the new Speaker of the House, Mike Johnson (R-LA). Throughout his career in Congress, Johnson has been opposed to such special interest power plays. Johnson has lined up squarely against Big Pharma’s special interest legislative agenda. The reason is simple: he believes the free market should determine drug prices, not government bureaucrats that conspire with crony capitalist corporations and their affiliated trade associations. Imagine that!
PhRMA is hoping they can influence Speaker Johnson because the lobbyist they just signed used to work for him when he served as the chairman of the Republican Study Committee. However, this is not how the new Speaker of the House operates. The main characteristic of his career in Congress is that he is grounded in conservative principles and is not pressured by powerful interests.
In November, Speaker Johnson hired Drew Keyes, another former staffer from the Republican Study Committee, as his top healthcare policy adviser. He made this selection because of his confidence in Keyes as someone he can trust.
In fact, this summer, Keyes, then a think tank staffer, wrote an opinion piece titled “Congress Should Not Do the Bidding of a Dying Trade Association.” The trade association he referenced was, of course, PhRMA.
As Keyes noted, the PBM Transparency Act is a crony giveaway to drugmakers who “desperately [point] the finger away from themselves and towards PBMs” when it comes to discussing the reason for high drug costs in America. He wrote, “When three pharmaceutical company executives sat with their PBM rivals at a recent Senate Health, Education, Labor, and Pensions (HELP) committee hearing chaired by Senator Bernie Sanders, their biggest critic, they desperately pointed the finger away from themselves and toward PBMs. The next day, Sanders’ committee marked up a bill to significantly increase federal regulation of PBMs.”
Keyes correctly identified the problem, writing, “Falling for Big Pharma’s blame game by targeting PBMs won’t help everyday Americans get the care they need. That’s what Congress needs to understand.”
It would have been easy for Keyes to take “donation” money from this fourth-largest lobbying entity in the country and peddle PhRMA’s misleading talking points about PBMs, but he chose to advance the truth instead. This is exactly why Speaker Johnson hired him to a key position on his staff. More members of Congress need to follow his lead and not be afraid to show lobbyists the door.
PhRMA is not accustomed to members of Congress in leadership positions rejecting its advances. With House Speaker Mike Johnson, it would behoove them to accept this new reality.
Thank goodness House Republicans have a new Speaker who is a principled conservative. For PhRMA, it is time to put the checkbooks away and engage in serious policy discussions about the best course of action for the American people.
Jeff Crouere is a native New Orleanian and his award-winning program, “Ringside Politics,” airs Saturdays from Noon until 1 p.m. CT nationally on Real America's Voice TV Network & AmericasVoice.News and weekdays from 7-11 a.m. CT on WGSO 990-AM & Wgso.com. He is a political columnist, the author of America's Last Chance and provides regular commentaries on the Jeff Crouere YouTube channel and on Crouere.net. For more information, email him at jcrouere@gmail.com