The rising cost of health care is an issue that impacts families and businesses in Detroit, across the state, and throughout the country—particularly the seemingly ever-increasing prices of prescription drugs.
This is clearly a problem that requires thoughtful policymaking and perhaps even some regulatory changes to ensure Michiganders, and all Americans, are able to access the prescriptions they need at prices they can afford.
The Federal Trade Commission has begun examining some of the factors that could potentially be contributing to the surging costs of prescription drugs. While a thoughtful inquiry could be a welcome and long-overdue step, it is critically important that the agency direct its inquiry to the market participants behind the spiraling costs of prescription drugs and examine the often-arbitrary prices and price increases set by major pharmaceutical companies and drug manufacturers themselves.
Instead, the FTC is currently focusing their efforts on picking apart the relationship between Pharmacy Benefit Managers, or PBMs, and independent pharmacies. Through my role as Wayne County Commissioner for District 2 — and my involvement in SEIU Healthcare Michigan — I have come to gain a greater understanding and appreciation of the critical role PBMs play in keeping prescriptions more affordable and accessible.
In my experience, PBMs do not contribute to the rising costs of prescription drugs—in fact, they do the exact opposite.
Essentially, PBMs act as a negotiator and liaison with major drug companies and pharmacies for nearly every kind of health care plan imaginable — from union-negotiated plans to self-insured and commercial ones to government-run ones like Medicare Part D and Medicaid. In addition to administering drug benefits seamlessly and nearly instantly, PBMs use their vast purchasing power to negotiate with drug makers and pharmacies for lower prescription drug costs for everyone with health insurance nationwide.
When it comes to prescriptions, affordability is the key to helping patients stay on their drugs, which leads to better health. Not only does that help vulnerable or at-risk Michiganders live healthier lives, but it also helps the ease strain on our overburdened health care system. By negotiating lower prescription drug costs, PBMs help keep patients and entire communities healthier and more productive.
Conversely, if patients can’t afford their medications, then they are less likely to take them on a regular basis and more likely to end up in poor health, undermining the quality of life — or even threatening the lives — of Michiganders while putting more of a strain on our entire health care system. That is why PBMs are such an important part of the health care landscape — they advocate for patients and work to make prescription drugs more accessible and affordable.
SEIU uses a PBM to reduce prescription drug costs, and our plan’s PBM is doing just that, just as PBMs are for every Michigan health plan. The money that PBMs help Michiganders save every year by working with health care plans and negotiating with drug manufacturers is money that can go toward college savings, retirement, increased gas costs, family vacations or any number of other household priorities. In these turbulent economic times, PBMs are helping to make a real difference for patients by controlling costs to the greatest extent possible.
If the FTC is serious about addressing the true factors that contribute to the skyrocketing prices of prescription drugs, then it should examine the price-setting practices of major pharmaceutical companies and drug manufacturers. They are the ones that most determine the costs Americans pay for the critical medications they need to live healthier lives—and in some cases, to survive.
Artificially and arbitrarily high prices and continuous price hikes — as well as an array of anticompetitive practices used by drug manufacturers — are the primary reason so many Michiganders struggle to afford their prescriptions, undermining access and adherence and leading to less healthy communities. That is what the FTC should really be looking into, not the role of PBMs, which are perhaps the single-biggest driver of lowering prescription drug prices for patients and health care plans nationwide.
If we are going to address the issue of high prescription drug costs once and for all, then we need to get to the root of the problem. We know where that is, so let’s start digging.
Jonathan C. Kinloch is a Wayne County Commissioner (District 2), Chairman of the Detroit/Wayne County Port Authority and Chair of the 13th Congressional District Democratic Party.