Sept 07, 2018
"to elevate the condition of men--to lift artificial weights from all shoulders, to clear the paths of laudable pursuit for all, to afford all an unfettered start and a fair chance, in the race of life." --Abraham Lincoln
Chairman's Note: States Don't Need Federal Health Care Regulation
And pharmacist “gag rules” are only making it worse.
These contract clauses between pharmacies on one side and insurers and pharmacy benefit managers on the other, prevent pharmacists from telling customers they could save money on prescriptions by paying with cash instead of using insurance. Pharmacists are actually prohibited from helping their customers get the best price for their medications.
According to a recent study, about 23% of all drug claims in 2013 involved overpayments, amounting to more than $135 million.
And who pockets those extra dollars? The insurers or benefit managers – in other words, the pharma middlemen.
This is undoubtedly a problem. It is only further evidence of our broken drug pricing system unnecessarily hurting the American people.
And we can all agree that this problem must be fixed. What I believe we must consider, however, is how to best address the problem, who is best equipped to do so, and whether it has already been fixed.
Senator Collins recently introduced a bill which mandates that gag clauses be prohibited under all health insurance plans, including individual and group plans that are administered by states.
The federal government can and should prohibit gag clauses in the plans that it administers. But it cannot and should not intervene in plans that it does not.
Many states have already made great progress on this issue. 26 states have already passed laws banning gag rules, and another 11 states are currently in the process of trying to pass them.
And we ought to leave space for them to do so.
Some have suggested that this state action and increased attention to the cost of prescription drugs has more or less solved this problem and greatly limited the use of gag clauses already. It’s notable that the previously referenced study – the only data we have on this issue – looked at practices from five years ago. The states more directly witnessed this problem, and since then were able to nimbly and capably fix it.
However, even if gag clauses are still in use, we must recognize that it is not the role of the federal government to regulate entities under the jurisdiction of the states. However well-intentioned, when Congress oversteps its authority like this, we usually end up doing more harm than good.
This Monday, Congress will vote on a bill that would ban gag rule contracts nationwide. This is a step too far. States are already solving this problem on their own. That is why I will offer an amendment that would narrow the scope of the legislation to its proper scope. Instead of the bill applying to all health plans, my amendment would limit its application to only self-insured group plans, which Congress previously exempted from state regulation. This would close a loophole where states are unable to reach to provide Americans additional transparency surrounding the cost of their prescription drugs.
While the overall goal of the underlying bill is laudable, we must remember that it is neither the role nor the duty of the federal government to regulate all aspects of commerce and Americans’ everyday lives.
The way to help ordinary Americans with high drug costs is not to further cede power to Washington. The federal government’s intervention in healthcare has already caused huge distortions in the market, for which Americans pay a steeper price every year.
Issue in Focus: Standards of Identity
The American food industry has seen incredible innovation over the last several decades. Not only is healthier, safer food more accessible and affordable than ever, but whole new foods are being offered. Safe, tasty alternatives to meat, dairy, gluten, and eggs are now ubiquitous, especially plant-based dairy alternatives like almond, soy, and coconut milks.
This should be the kind of story Americans celebrate, an example of American entrepreneurship and innovation at its best. It should be – but isn’t. Consumers may like milk alternatives, but politicians seem opposed.
According to a proposed rule from the Food and Drug Administration, these products don’t “count” as milk and must either be renamed or pulled from grocery store shelves.
Under an antiquated 1938 law, the FDA has the power to set “standards of identity,” rules defining what does and does not qualify as a particular food product. And according to the FDA, the word “milk” can only describe “lacteal secretion, practically free from colostrum, obtained by the complete milking of one or more healthy cows.”
And so, the FDA wants to crack down on milk alternatives. They say it’s for consumer safety. The facts suggest otherwise.
First, standards of identity have a history of non-enforcement. To start picking and choosing which of the 280 outdated definitions to enforce now would seem arbitrary, or worse.
Part of the reason these rules haven’t been fully enforced is that the regulations themselves haven’t kept pace with many of the modern food innovations over the years. Furthermore, today food products are required to include ingredients on the label. Consumers know what they’re buying and eating.
So what is the real reason for the sudden crackdown? As with so many things in Washington, follow the money.
Dairy sales have been falling since the 1970s and dramatically over the past seven years, while the market for plant-based alternatives has only grown. Between 2011 and 2015, the total milk market shrunk by more than $1 billion; and almond milk sales alone grew by 250%.
Proponents of the FDA’s proposed rule call these products an “attack” on dairy farmers. And therein lies the real motive: to stifle competition and prop up the dairy industry.
The FDA crackdown is just a classic example of cronyism – big business conspiring with big government to rig the economy for them and against their customers.
A few weeks ago, I introduced legislation that would protect standards of identity regulations from this kind of abuse. My amendment to the farm bill would have prevented the FDA from enforcing these rules against products simply because of their use of a common compound name, and so protect everything from “almond milk” to “cashew butter” and “gluten-free bread” from silly accusations of illegal labeling.
