Speaker Johnson Is Right, Free Market Should Set Drug Prices, Not Government

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 the drugmakers decide to independently raise prices; 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 strictly on federal lobbying, ranking as the fourth highest in the nation.

The group recently hired more lobbying firepower, YC Consulting, in an effort to convince the United States 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 as low as possible.

As Big Pharma pushes for more regulations...

Fortunately, PBMs have been successful, as Americans need savings in an economy with inflation, high interest rates, soaring grocery costs and insurance premiums that are skyrocketing. The data shows that PBMs save each consumer an average of $1,040 annually.

Because of this successful track record, Seema Verma, the Trump Administration Centers for Medicare and Medicaid Services Administrator, said that she is very thankful that the federal government uses PBMs to keep prescription drug costs lower. Unfortunately, the pharmaceutical companies are not very enthused about these results. This is why they are desperately trying to neuter the effectiveness of PBMs through regulation.

As Big Pharma pushes for more regulations, they will be facing 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. When he was Chair of the Republican Study Committee, he advocated a conservative alternative to Obamacare, consistently supporting fewer healthcare regulations.

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

PhRMA is hoping they can influence Speaker Johnson because the lobbyist they just signed used to work for him when he led the Republican Study Committee. However, this is not how the new Speaker of the House operates. Throughout his career in the House of Representatives, Johnson has been grounded in conservative principles and not swayed by the pressure from powerful interest groups.

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 trust in Keyes and his confidence in his abilities.

Earlier this year, as a think tank staffer, Keyes, 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 refuse to take responsibility for the 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.”

More members of Congress need to follow his lead and not be afraid to show lobbyists the door

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 the 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 start to engage in serious policy discussions about what is the best course of action for the American people. Adding new layers of onerous federal regulations is never the answer for these types of problems in this country as it only makes our economic and healthcare challenges much worse.