Transparency as Cover for Corporatism

You might have heard recently about Senate Bill 437, which purports to make the cost of prescription drugs more transparent:

Healthcare advocates who are pushing for bills to combat rising prescription drug prices in Maryland drew sympathy but also skepticism from state lawmakers Wednesday.

The General Assembly is considering a pair of bills. One would require drug companies to give notice of and explain significant price hikes. The other would authorize the attorney general to sue makers of generic drugs who engage in price gouging.

“We want drug manufacturers to make profits. We want them to produce generic drugs,” Attorney General Brian Frosh told the Senate Finance Committee. “But when they acquire and abuse monopoly powers, they hurt patients, they threaten our health care system and they damage our communities.”

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Frosh was joined by Baltimore Health Commissioner Dr. Leana Wen, Baltimore County Executive Kevin Kamenetz, Prince George’s County Executive Rushern Baker and representatives from Maryland Health Care for All, churches, the NAACP and the state medical society. Several told stories about people they know who have struggled to pay high drug prices.

The increase in the cost of prescription drugs is a legitimate concern. However, the campaign against big pharma and push for “pharmaceutical transparency” is really corporatism and political opportunism at work as evidenced by those pushing for it:  Vinny DeMarco, Brian Frosh, Kevin Kamenetz and Rushern Baker

We all know that Vinny DeMarco is a hired gun for any one who will pay him. The fact that DeMarco took money from tobacco companies while simultaneously pushing for higher tobacco taxes says everything you need to know about him. Brian Frosh is an activist political hack, while Kamenetz and Baker are johnny come lately’s looking for an issue to raise their profile to run against Governor Hogan.

The push for “pharmaceutical transparency” is active in other states, but only Vermont has passed a law. But the bill itself will do nothing to address prices and everything to hurt businesses in Maryland’s thriving biotech sector. As Jay Steinmetz wrote in The Daily Record:

We should all be concerned about rising health care costs, but passing legislation that threatens Maryland’s innovation economy and weakens competition in the market is not the solution.

The health insurance industry has tried to pass so-called “pharmaceutical transparency” or drug pricing legislation in other states, including in Virginia last year. That legislation failed because Virginians know it was bad for the state’s economy and because it would do little – if nothing at all – to bring down health care costs.

At the time, The Associated Press reported: “Virginia is the latest in a number of states where health insurers have tried similar measures since last year. Those efforts have so far failed…” In fact, insurers have tried unsuccessfully to pass similar legislation in at least 10 states, only succeeding in Vermont – a state very different than our own.

As the CEO of an innovative company that started in Maryland, employs people in Maryland and, hopefully, will continue to grow in Maryland, I am concerned that this legislation will undermine Maryland’s innovation economy.

Read the whole thing.

If transparency in pricing is such a concern then why not include the health insurance and pharmacy benefit managers (PMBs) into the mix? Because it is really the PBMs and Insurance industry pushing these bills across the country. Here’s more about PMBs:

Pharmacy benefit managers act as middlemen between drug companies and patients, pharmacists and insurers. They determine which medicines are covered, and at what co-pay or co-insurance level, for 210 million Americans’ health plans. They’re abusing this role to rake in enormous profits — at the expense of patients’ health.

The gatekeeper role gives PBMs enormous bargaining power to buy medicines in bulk. Just three PBMs dominate 70% of the market, and pharmaceutical companies know they will not be able to access millions of patients unless they accommodate the demands of PBMs.

One of the PBM companies, Express Scripts, got caught up as a donor in Martin O’Malley’s DGA Scandal and was previously caught inflating drug prices:

Prescription company MEDCO made $225,000 in donations to the DGA during a time in which the company it was merging with, Express Scripts, received a multi-billion prescription contract from the state despite numerous legal troubles Express Scripts had several years earlier in nearly 30 states, including Maryland, which accused the business of inflating prices.

Insurance industry pushing legislation in other states.

Senator Steve Hershey fought the good fight against this bad legislation in Committee:

Some committee members were skeptical that the proposed legislation would do anything to contain price increases.

“I don’t know that this fixes that one bad actor,” Sen. Stephen Hershey said.

The Eastern Shore Republican noted that “multiple players” — the drug maker, insurance companies and pharmacy benefit managers, for example — affect the final price of a drug.

So what is all of the fuss about pharmaceutical transparency really about?  It’s nothing more than another case of hack for hire Vinny DeMarco using unscrupulously ambitious politicians to demagogue an issue against an easily vilified target (pharmaceutical companies) in order to push a policy that in the end will not fulfill its ostensible purpose. Meanwhile, DeMarco wants to make sure to shield other culprits that play a role in driving the cost of prescription drugs.

As always, this is a situation where Vinny DeMarco is earning his paycheck as a hired gun, and make sure that he has the Democratic elected officials in his pocket to do his dirty work for him. As always with DeMarco it’s not about people, it’s about pushing corporatism for those signing his paychecks and increasing the power of the state at expense of consumers and, in this case, patients.

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