New Florida law weakens only group with power on drug pricing

When it comes to reining in the major pharmaceutical companies, Gov. Ron DeSantis talks big game. He says, “it’s managed to escape the public eye and work in the shadows for far too long.”

He’s right: The Pharmaceutical Research and Manufacturers of America (also known as PhRma) has raised prescription drug prices in Florida to insurmountable heights. The result is that nearly 30% of cost-conscious state residents have cause to stop taking their prescription medications.

Unfortunately, however, when it comes to reining in the major pharmaceutical companies, the governor always talks the talk, but he never seems to walk the walk. Gov. DeSantis’ recent signing of legislation to significantly weaken pharmaceutical benefit managers — the only entities with the power to prevent the trade group from inflating the cost of our drugs — highlights this point well.

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The governor, who has taken more than $350,000 in campaign contributions from the pharmaceutical industry since 2019, said his regulation will protect consumers and increase accountability, but in reality it will reduce both.

Unions, governments and insurance companies hire pharmaceutical benefit managers to act as the de facto negotiating agents and managers for their health plans. Most retain a significant number of the nation’s health plans’ sponsors as clients, so they have a ton of buying power and leverage to use against PhRma when they purchase our prescription drugs.

In commenting on these regulations, a county commissioner and former union representative who deals with pharmaceutical benefit managers daily hit the nail on the head. He noted that when the benefit managers lose in their negotiations, “patients lose when they look at their drug bills every month.”

Scott Hague, who works with the Insure the Uninsured Project, affirmed his point, stating that “[Pharmaceutical benefit managers] have the clout to take on the drug manufacturers, squeeze their profit margins and get a better deal for patients.”

Government data and studies conducted by analysts across the political spectrum speak to this truth.

In his April 2008 testimony to Congress, Peter Orszag, former budget chief under President Obama, said that pharmaceutical benefit managers are “the primary explanation for why Part D in Medicare is costing a lot less than was projected initially.” Casey Mulligan, former chair of President Trump’s Council of Economic Advisers, has also found that these benefit managers save healthcare consumers significant amounts of money. A 2022 analysis he completed for the National Bureau of Economic Research found that they add close to $200 billion in value to society every year.

If Gov. DeSantis truly cares about lowering our drug costs, he would be going after the big drug companies, not the thorns in their sides.

Three drug wholesalers, which nearly every attorney general in the country (including Florida’s) has investigated for price-gouging, distribute more than 90% of this country’s wholesale drugs. They have too much power and influence over the U.S. health care system. According to The Washington Post, they are “a telling example of why U.S. health care costs continue to rise” because their “financial incentives are skewed toward driving costs higher.”

Perhaps Gov. DeSantis will one day wake up and begin taking on the major pharmaceutical companies, rather than their pro-consumer adversaries. Perhaps he will stop cashing PhRma’s political contributions and start doing what’s best for the residents of this state rather than what’s best for lobbyists and paymasters.

With more than three-fourths of this state worried about affording future healthcare bills, one can only hope. But I won’t hold my breath.

Daniel Henry, a former member of the Democratic National Committee, is chairman of the Duval County Democratic Party.

This guest column is the opinion of the author and does not necessarily represent the views of the Times-Union. We welcome a diversity of opinions.

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