American Prosperity Alliance Supports H.R. 6283: The Delinking Revenue from Unfair Gouging (DRUG) Act.

American Prosperity Alliance (APA) supports policies that promote economic prosperity in America.

For too long, Americans have paid higher prices for prescription drugs due to Pharmacy Benefit Managers (PBMs) putting their interests ahead of their customers. Today, three PBMs control roughly 89% of the market, serving 270 million Americans.  Because of their immense consolidated market power, these three PBMs often demand that drug manufacturers pay them exorbitant fees and rebates in order to access their patients, which contributes to the overall cost of drugs going up. Unfortunately, there is no requirement that these fees or rebates be shared with the insured individual.  To make matters worse, the fees and rebates charged by PBMs are often tied to the list price of a medicine. This means that the insurance company you are paying to negotiate drug prices on your behalf is actually making more money when you pay more, not the other way around like it’s supposed to be. According to Senator Ron Wyden (D-OR), Chairman of the Senate Finance Committee, the tying of PMB fees to the list price of a medicine “encourage[s] drug middlemen [PBMs] to favor higher priced drugs … they win when prices are higher, not lower.” 

According to the Congressional Research Service, roughly 224 million Americans are covered in the commercial insurance market (179 million in group health insurance; 45 million in the non-group market); that is 68.4% of the U.S. population. According to a 2019 study published by the Commonwealth Fund, manufacturer rebates to PBMs reached nearly $90 billion in 2016. To Ignore PBM reform is to ignore nearly 70% of Americans and the tens of billions of dollars being wasted on drug middlemen.  Those billions should instead be flowing to beneficiaries in the form of lower drug prices. 

To advance the economic interests of consumers, APA supports H.R. 6283: The Delinking Revenue from Unfair Gouging (DRUG) Act, which offers a proper path forward to reforming the distorted drug pricing system in our country by ending outdated practices emanating from a highly-concentrated, inefficient market. APA urges Congress not to leave 224 million Americans behind in a broken insurance system that is forcing them to pay more than they have to.