Currently, Americans are grappling with the harsh reality of increased prices on everything from gas to groceries. We see firsthand the consequences of modern monetary theory and the devastation it brings. Unfortunately, the many Americans that struggle with diabetes are no stranger to increased prices. The cost of insulin has been steadily rising for decades.
While progressives are all too eager to blame high prices on “corporate greed,” the reality is that this is an issue created by the federal government. Heavy-handed price controls are a deeply flawed solution that misses the mark when identifying the problem.
Pharmacy benefit managers (PBMs) play a significant role in the dramatic rise in the cost of prescription drugs. PBMs are third-party administrators determining which drugs go on formularies (a list of approved prescription drugs that hospitals can prescribe and are covered under an insurance policy). Ostensibly, PBMs negotiate to obtain the best price. However, these “savings” are often pocketed by PBMs themselves and aren’t passed onto patients. Since they are reimbursed based on the markdown from the original list price, PBMs are incentivized to prioritize drugs with higher list prices, so they can receive a larger markdown.
There are free-market alternatives to lower the cost of insulin and healthcare in general. For example, it was reported in an article in The Federalist,“A consortium of hospitals recently announced plans to build a factory that can manufacture insulin within two years. Once their plant gets up and running, the non-profit consortium said it would sell the insulin at a cost of $30 a vial — a fraction of what pharmaceutical companies currently charge.”
This legislation is a simplistic proposal to address a highly complex problem. We cannot afford half-hearted proposals based on unsound economics like this one for an issue that impacts so many.
FreedomWorks will count the vote for H.R. 6833 on our 2022 Congressional Scorecard and reserves the right to score any amendments, motions, or other related votes. The scorecard is used to determine eligibility for the FreedomFighter Award, which recognizes Members of the House and Senate who consistently vote to support economic freedom and individual liberty.