When Will Biden Really Address Healthcare Inflation?
On March 15, the White House announced that Medicare will start fining drug companies that hike prices faster than the country’s inflation rate. While many federal politicians always seems quick to use the big stick of government to punish the common scapegoats for America’s high prescription drug prices, they never seems willing to use the power of their pulpits to address the true root cause of it all.
President Biden should be aware that three drug wholesalers, Amerisource Bergen, Cardinal Health, and McKesson Corporation, distribute 90% of the drugs on the American marketplace, and they use their market power to keep the 9 out of 10 drugs they dispense as high as possible. After all, his Department of Justice and Federal Trade Commission have been all over these three companies.
In January, Cardinal Health promised $13 million to the DOJ to settle allegations that it paid kickbacks to physicians. This news followed a $141 million settlement that McKesson agreed to for “falsely attribut[ing] generic drug price increases to nonexistent supply disruptions, instead of anticompetitive conduct,” just weeks earlier, as well as a lawsuit filed by the U.S. government in December against Amerisource Bergen for violating the Controlled Substance Act.
These examples, while recent, are far from comprehensive. Decades of history prove how these three companies are responsible for much of America’s drug pricing issues. That’s why Michael E. Cole, a Connecticut assistant attorney general, said “the wholesalers should be the sentinel” of all governmental investigations.
Many also consider the three big wholesalers largely responsible for America’s opioid epidemic. They have paid $21 billion in settlement funds to the state over this issue. Clocking in at just over 38% of the country’s total opioid settlement payments, the Big Three have paid out more settlement money to the states than any other healthcare actor, and an astounding 250% more than the entity with the industry’s second highest payout sum.
Yet, for all the grandstanding he does against drug companies, President Biden never orates so much as a peep of criticism against these drug wholesalers. It’s as baffling as it is sad.
Yes, all three of these wholesalers are fully committed to advancing an aggressive climate change agenda, and yes, some of their executives were significant financial supporters of his 2020 campaign, but should either of these two points allow the president to turn the other cheek on the direct impact they’re having on perhaps the most significant and consequential issue facing the nation today?
Inflation is ravishing American families. From gasoline to energy prices, eggs to baby formula, citizens of this country are now being forced to make tough choices about everyday spending decisions to make ends meet. In many instances, prescription drugs top this list. Millions of Americans of all income levels depend on prescription drugs to survive, and they can’t avoid purchasing them based on cost.
It may be politically smart for President Biden to use his bully pulpit to continually bash drug companies, but his verbal lashings won’t make a bottom-line difference to those in need. Only real reform, like addressing the monopoly-like grip that these three companies have on the United States’ drug distribution networks, will.
The time has come for both parties to put aside their ideological differences and do something beneficial for the American people. Breaking up the drug distribution sham controlled by these three companies would be a great first step. It would benefit all Americans, especially those whose ability to take medications has become a matter of life or death.
Andrew Langer is the president of Institute for Liberty.
