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WATCH: Former Trump Health Care Adviser Explains the Reason Drug Prices Keep Skyrocketing

Health care is something that impacts each and every American, regardless of where a person stands politically. And the cold hard truth is that America's current health care system is only working for the insurance and pharmaceutical companies. 


During an interview with Prager University's Candace Owens, President Donald Trump's former health care advisor, Katy Talento, explained why Americans are frustrated with the current health care system.

The duo used Owens' asthma as a basis for explaining of the industry works.

“It’s become so non-partisan. It used to be in health care Republican versus Democrat. Now it’s really just the health care swamp versus the rest of us," Talento explained. "What we’re talking about is everyone has to get paid. The doctor, he writes a prescription. The manufacturer who makes the inhaler, all the middle men between them and you, the insurance company, the pharmaceutical benefit manager, the group purchasing organization, the retail pharmacy, the wholesale pharmacy and everyone’s taking a cut along the way. That is why drug prices have increased beyond the rate of inflation every year for the past 10 years. Hospital prices have increased. If you think this is just drugs, it’s also hospitals. It’s also doctors. It’s totally out of control.”

But the biggest issue facing the average American: the cost. 

Health care is the only industry in the nation where a person goes in for treatment, signs a piece of paper agreeing to pay for the cost of services, even though they have no idea what that cost will be. 


According to Talento, when patients are given that contract to sign, instead of signing their name they should write "I did not read this" on the signature line. When they get an unforeseen bill they can then go back and say they never consented to the blind cost they incurred. 

“Health care is the only industry where the sellers of care – insurers and hospitals – conspire together to hook up secret pricing contracts with each other and they hide them from buyers of care: patients, employers and taxpayers," she explained. 

According to Talento, premiums are up 55 percent over the last 10 years while deductibles on employer-sponsored care has tripled. Wages growth is up 26 percent, which is great, but it's being eaten up increasing medical costs. And those medical costs are having detrimental impacts. One in five Americans are in medical collections and half of all collections are medical collections, Talento revealed. But the saddest reality: most Americans have less money in their bank accounts than the cost of their deductibles. 

When President Donald Trump laid out his blueprint for drug pricing transparency, he wanted to help relieve the financial burden Americans have continually felt.


"We pay more for drugs here than we do overseas," Talento told Townhall. "In President Trump's mind, we should have the lowest prices in the world."

We see such a huge mark-up in prices compared to other nations is because everyone has to have their hand in the cookie jar. 

One of the reasons there are price increases has to do with "rebates." In order for a medication to be listed on a health insurance plan's tiered rate, the drug manufacturer must pay the insurance company to be on the list. A drug that costs $1,000 to produce but costs $3,000 to be put on that tier then costs $4,000 to produce. And guess who eats up that cost increase? That's right. You. The consumer. 

And here's where things get even swampier: the Pharmaceutical Benefit Managers (PBM) are the people who determine what drugs can and cannot be on the tiers and they are controlled by three main companies throughout the world. Insurance companies partner with these PBMs and essentially control every aspect of the supply chain. 

When President Trump announced his plan to make pharmaceutical companies advertise their prices on TV ads, their lobbyists instantly went to work opposing the plan. 


"Instead of wanting to post their prices on TV ads, Pharma wanted to establish a website where people could find pricing," Talento told Townhall. "They wanted to post the website link on the ad instead of the price. [The Trump administration] told them they could do their website but we still wanted to see pricing on ads." 

Although Big Pharma is fighting President Trump's pricing transparency at every turn, 88 percent of the public supports the move, Talento said. 

The Department of Health and Human Services is currently seeking comments on the proposal. Pharmaceutical companies have already submitted their comments but HHS wants to hear from average Americans.

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