The first rule of health care is “do not harm,” a pledge that politicians should adopt as they seek to fix Iowa’s healthcare crisis.
The simple fact is health care in Iowa is flatlining. Over the past decade and a half, 250 healthcare facilities have permanently shut their doors, with those in rural areas bearing the brunt of the problem. If you can access health care, you will face the stark reality of its cost. The Hawkeye State has seen healthcare costs rise at about triple the inflation rate. The populous understands that reality.
According to recent data from the Iowa Association of Business and Industry, the cost of healthcare is the primary concern shared by its business customers. This finding makes sense given that healthcare costs are projected to increase 9–10 percent through 2026. Meanwhile, Iowa already ranks 41 out of the 50 states on healthcare affordability burdens, with 26% of its residents having already faced one.
If politicians can do one thing, it’s read a poll. That is why they promise to take action to provide seniors with the relief they need. The problem is that their current “solution” to this problem — regulating pharmacy benefit companies, which some members of Congress are attempting to do before the year’s end, is like a rigged carnival game designed to benefit Big Pharma.
Pharmacy benefit companies are groups that both business and government health plans (including my business health plan) hire to negotiate with drug manufacturers for bulk-pricing discounts and to get cheaper drugs approved for use on health care plans. They also use their purchasing power to secure lower prices from drug companies.
Pharmacy benefit companies work. A 2019 study from the Government Accountability Office found that the drug price rebates they negotiated “offset Medicare Part D spending by 20 percent, from $145 billion to $116 billion.” However, these offsets directly threaten Big Pharma’s profit margins, so drug companies are aggressively lobbying against pharmacy benefit companies in Des Moines and D.C.
The drugmakers are trying to convince Congress and the White House that they don’t share enough of the costs they save. Still, as noted above, the data from the independent, non-partisan research and watchdog agency that reports to Congress demonstrates otherwise. Regulating these companies would increase drug costs, not decrease them, and that’s precisely what Big Pharma wants.
Sadly, some well-intentioned political heavy-hitters in Iowa have been misled by Big Pharma’s deceptive lobbying and talking points against pharmacy benefit companies.
In 2022, the state enacted legislation forcing PBMs to determine pricing based on a government-produced price survey. Retailer pharmacists have joined forces with Big Pharma, seeking to enact additional legislation to affect the establishment of pharmacy networks.
At the federal level, Rep. Mariannette Miller-Meeks has introduced federal anti-pharmacy benefit company legislation, as has Iowa legend Sen. Chuck Grassley. These Iowans mean well, but the result of their efforts will only embolden the prescription drug industry further.
Congress should reject these ill-advised proposals to hamstring pharmacy benefit companies. They only need to look back to 2008 to see what happens when any industry gets to write its own rules.
Rather than inadvertently playing the drug industry’s game of Three-Card Monty, our politicians should strengthen existing price transparency rules on hospitals, limit Big Pharma’s ability to price-gouge in the marketplace, and stop the industry collusion that keeps our drugs unaffordable. It’s the only way to ensure that we, the people, can finally get the well-deserved victory we need.
Jeffrey Bradford, PhD, is an Iowa-based financial and retirement strategist.
Author: Jeffrey Bradford
Jeffrey Bradford, PhD, is an Iowa-based financial and retirement strategist.
