(Daily360.com) – Democrat members of Congress are working on legislation that looks like it would be a massive bailout for the pharmaceutical industry. Outside observers are saying there appears to be a strong alliance between the left-wing members of Congress and Big Pharma that would result in a giant tax-payer funded bailout of the biggest companies in the sector.
The legislation would in part remove incentives for Pharmacy Benefit Managers (PBMs) to drive up rebates available to consumers. These rebates are an important part of the insurance equation for small businesses that try and give their employees better health care options. Conservatives and economists are warning that this kind of deal could destroy the free market prescription drug market and hurt consumers.
Experts say that if incentives are “delinked” for PBM’s to try and negotiate lower drug prices the Pharma industry could see a $32 billion earnings increase from both the Medicare Part D and commercial markets. Members of the GOP including Rep. Eric Burlison (R-MO) are saying these Democrat proposals would guarantee an increase in prescription costs for patients in need. He says legislation like this puts Americans on a one-way road to single payer health care. Burlison warned that every time Congress involves itself with the healthcare system they make it worse and more expensive for citizens.
The Democrats who are working on this legislation would basically ensure no competition regarding prescription costs. Without competition and negotiators working to lower prices the pharma companies can in essence name their own price. Pharma companies typically bristle at the idea of working with PBMs and would like nothing more than to eliminate them from the industry. The CEO of Matrix Global Advisors (MGA), Alex Brill, said during a recent panel discussion that Big Pharma’s plan to “point fingers” at PBMs is their way of taking the cost spotlight off themselves. Experts say that unless a number of strong conservatives in Congress hold the line and stop this legislation, Big Pharma will seize total control of America’s health care industry.
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