As the Missouri General Assembly seeks to grapple with a steady rise in the cost of prescription drugs, we should expect lawmakers to hold accountable those responsible for the rapid increase in the price of drugs.
Indeed, year after year, major pharmaceutical corporations, often based overseas, have raised their list prices on essential medications.
In 2022, Johnson & Johnson, Merck and Bristol Myers Squibb alone reported over $38 billion in profits, all while exponentially increasing the price of their products every year. While these numbers are surely cause for celebration in the corporate boardrooms of Big Pharma, Missouri employers, unions and patients have borne the cost.
Flush with profits, Big Pharma has prescribed Missouri legislators a steady regimen of propaganda designed to place the blame for higher prices on anyone but it. I suppose we shouldn’t be surprised the Legislature is presently advancing priority legislation for drug companies that will only exasperate higher prices.
SB 45 and HB 982 have both advanced out of their respective Health Committees, and now await consideration on the House and Senate Floor. These bills do nothing to address the high prices set by pharmaceutical companies, but rather, seek to weaken Pharmacy Benefit Managers – the primary economic entity designed to force drug companies to offer a lower price.
Of course, pharmaceutical companies know their reputations don’t carry much weight with lawmakers. Wisely, they have lurked in the shadow of the Capitol rotunda, while funding state pharmacy associations and “patient advocacy groups” to serve as their primary messengers.
In fact, the drug wholesaler McKesson, ranked 9th on the Fortune 500 list, recently announced a major investment in all 50 state pharmacy associations. McKesson is vertically integrated with drug manufacturer NorthStar, along with the pharmacies that sell drugs at retail and the pharmacy services administrative organizations that negotiate reimbursement rates for most pharmacists.
Now, legislators who believe they are helping their local pharmacists are poised to pass Big Pharma’s legislative agenda.
SB 45 and HB 982 would implement a Pharma scheme known as “couponing.” After spending millions advertising their high list price drugs, Pharma companies rely on consumers to pick their brand name drugs over less expensive alternatives. Employers and unions who provide prescription drug benefits often will incentivize their plan participants to select a lower-cost option through a reduced co-payment.
To eliminate this incentive, drug manufacturers want to offer coupons that cover only the cost-share obligation of the patient. They then stick Missouri employers and unions with the bill for their high-priced drug. At the federal level, these scams are banned as illegal kickbacks in the Medicare program.
Just last year in Congress, Big Pharma spent tens of millions of dollars lobbying to ban health plan sponsors from paying their PBM an incentive for negotiating a better deal from drug manufacturers. Luckily, President Trump and Elon Musk sank this lame duck effort at the end of last year. Meanwhile, SB 45 and HB 982 seek to bring back these restrictions on health plan sponsors in the state of Missouri.
Missouri can’t afford to bail out Big Pharma. High drug costs are crippling employer- and union-sponsored health plans. Big Pharma’s legislative agenda will only make things worse, and Missouri House and Senate members should reject it.
