Former Chief Economist for Health Committee Warns Against Government Intervention in Private Market

The Pharmaceutical Care Management Association (PCMA) shared a blog from former policy director and chief economist for the U.S. House Committee on Ways and Means Alex Brill, where he warns Congress against misguided government interventions in the private health care market that would boost Pharma’s profits and hike health care costs for everyone else.

He stressed that policies like mandating 100% pass-through of all price concessions to commercial plan sponsors would undermine pay-for-performance incentives in the commercial market. Brill asserts “The beneficiaries of such a consequence would be obvious: the drug manufacturers who pay these rebates, fees, and discounts.” Brill concludes with a warning of the hefty price tag of these policies for patients and families: “But we know with confidence that preserving the incentive for PBMs to negotiate for lower net drug prices is critical for them to do so aggressively.

Previously, I estimated that banning incentive structures among commercial plans could lead to health plan premiums increasing by $8.4 billion–$26.6 billion. While the magnitude of the risk associated with the policy discussed here is more modest, the direction of the impact can be expected to be the same. Plans will, on average, pay more, not less.”