As Congress and White House begin their work as a unified federal government, healthcare policy looms large on the horizon.  Under the Biden-Harris administration decision-making power continued to move away from patients to Washington bureaucrats.  Innovation has been stifled through price controls and an overreaching government.

To right the ship, the new Congress and the Trump administration should promote patient centered care, which would increase accessibility, affordability, and transparency.  Essential reforms should include eliminating price controls like those included in the Inflation Reduction Act (IRA), reform the disastrous 340B drug discount program, and stop legislation and regulations that would adversely impact pharmacy benefit managers (PBMs).  

Price controls on pharmaceuticals, allegedly aimed at making medications more affordable, not only suffer from the same defects as price controls in other industries but also reduce drug research and development, leading to an invisible graveyard of patients.  An August 2022 University of Chicago issue brief, “The Impact of Biopharmaceutical Innovation on Health Care Spending,” found that price controls on pharmaceuticals would increase healthcare spending by $50.8 billion over the next 20 years and result in 135 fewer new drugs, negatively impacting the lives of 2.47 million patients.  When governments impose restrictions on the prices that can be charged for drugs, pharmaceutical companies are faced with reduced revenue streams.  This diminished profitability can lead to a decrease in the funds available for future research and development.  

The 340B Drug Discount Program, which was designed to provide affordable medications to underserved populations through discounted prices for eligible healthcare providers, is heavily abused.  The lack of a clear patient definition and stringent oversight and accountability within the 340B Program has contributed to its exploitation.  Certain hospitals and outpatient facilities are prioritizing profits over patients.  The program is failing to accomplish its intended goal and has grown exponentially, lining the pockets of the special interest sharks rather than helping patients. 

In 2014, 340B discounted purchases were $9 billion, but by 2020, they reached $38 billion, or 322 percent more than in 2014, and a 27 percent increase from the $29.9 billion spent in 2019.  The healthcare data analytics firm IQVIA’s study, “The 340B Drug Discount Program Exceeds $100B in 2022,” found that the misuse of the funds by hospitals and contract pharmacies is ongoing, and patients are still not getting the benefits Congress intended them to receive.  The firm’s May 10, 2024, report cited $124 billion in 340B costs in 2023, 24 percent more than in 2022, which means the program “more than tripled in size” over the past five years.”   

PBMs play a vital role in administering drug plans for more than 275 million Americans who receive their health insurance from employers, unions, governments, insurers, and other entities.  These voluntary and competitive arrangements save an average of $1,040 per payer and patient annually, and the number of patients receiving these benefits continues to grow due to the efficiencies and savings they provide. 

The negotiating power of PBMs helps to secure 40 to 50 percent savings on prescription drugs and related medical costs for their customers.  The financial impact of not having a PBM was revealed in a March 31, 2023, Department of Labor (DOL) Office of Inspector General (OIG) Office of Audit report, which found that the DOL overspent $321.3 million in a six-year span (fiscal years 2015-2020) on prescription drugs for the Federal Employees’ Compensation Act (FECA) program because the Office of Workers’ Compensation Programs (OWCP) did not use a PBM.  Congress should stop interfering with a pharmacy benefit program that is run entirely by the private sector and forces no one to participate.

Congress and the Trump administration must focus on eliminating prices controls and end policies that stifle innovation and future drug development, stop the abuse of the 340B program, and allow PBMs to continue to save patients money.  The time for action will be short lived and these policies must be adopted early in 2025 to pave the way for less government interference in the healthcare system and greater freedom of choice for patients.