JOE’S DRUG-PRICE DODGE
DOES President Biden actually care about lowering prescription-drug costs? In a speech last week in Las Vegas, he touted his efforts to make prescription drugs more affordable, mostly through federal coercion and threats to pharmaceutical companies.
Yet the president is simultaneously refusing to implement a Trump-era rule that would help lower prices fairly, using the power of the free market. Our organization will file a lawsuit Thursday asking the federal courts to force the Biden administration to follow the law and give Americans real relief on prescription-drug prices.
The rule, issued in November 2020, requires health-insurance companies to publish drug-pricing information for individual and group plans, which includes employer-sponsored insurance.
The last administration heralded this policy as giving Americans the transparency that leads to better prices. Patients could pick the healthinsurance plans that offer the lowest drug costs, encouraging competing plans to lower their prices, too.
Health insurers would also find it more difficult to stealthily raise their prescription-drug prices.
As Seema Verma, then Centers for Medicare and Medicaid Services administrator, said when the rule was announced, “prices are about as clear as mud to patients,” and the policy was designed to bring long-overdue clarity.
That rule is grounded in economic common sense and basic free-market principles.
Transparent competition puts downward pressure on prices, as anyone who shops for groceries or cars can tell you. Yet health plans’ prescription-drug prices have long been hidden from public view.
The regulation cited numerous studies showing how even limited transparency in other parts of health care has saved consumers money — including by causing high-cost providers to lower their prices.
Considering that more than 1,200 prescription drugs saw their prices increase faster than inflation in 2021-2022, Americans clearly need help controlling the costs.
The rule was scheduled to go into effect Jan. 1, 2022. Yet in August 2021, Biden’s Treasury, Labor and Health and Human Services departments quietly issued a “Frequently Asked Questions” document in which they declined to implement drug-price transparency.
Under the guise of “enforcement discretion,” they announced they’d “defer” this part of the rule, with the goal of pursuing “further rulemaking” at an undetermined future date. The departments justified this delay by citing health-insurers’ claims the rule was unnecessary and duplicative of a 2021 law.
Yet that law, the Consolidated Appropriations Act, only requires insurers to provide drug-pricing information to federal agencies, not to the public in an easy-to-use format — which is the key to transparency and lowering prices through market pressure.
Treasury, Labor and HHS issued further FAQs in April and August 2022 that create broad exceptions to the rule while further delaying implementation.
Prescription-drug price transparency is effectively on indefinite hold. Yet the regulation is unambiguous: Health insurers were supposed to disclose prescription-drug prices more than 14 months ago.
For all its claims of enforcement discretion, the Biden administration has no legal authority to ignore a regulation with the force of law. The only legal way to prevent its implementation is to issue a formal rule that repeals or amends the current one. The Biden administration has shown no signs of going through this rigorous process, instead relying on FAQs that are equal parts arbitrary and informal.
We’re calling on the federal courts to force Team Biden to implement the transparency rule that’s on the books, without exceptions or delay. Biden & Co.’s inaction has already left patients with higher prices for prescription drugs.
Until and unless the Biden administration delivers this legally required transparency, the president can’t honestly claim he’s delivering the broad prescriptiondrug relief that Americans deserve.
Tarren Bragdon is CEO and Stewart Whitson is legal director of the Foundation for Government Accountability.