With prices for almost everything on the rise these days, President Joe Biden is hoping his latest executive order will cut Americans some slack when it comes to healthcare costs.
A recently signed executive order from President Biden gives a nod to President Trump’s healthcare policies by increasing competition in healthcare industries, affecting everything from hospital mergers to prescription drug costs. This free-market approach is the right way to help lower healthcare costs across the board, something American families desperately need.
Americans already pay 2.5 times as much, or more, on prescription drugs when compared to families in other similar countries. On average, Americans spend $1,200 per year on prescriptions alone. Overall, the cost of medication has been rising significantly faster than the rate of inflation. The same problem exists for healthcare equipment, such as hearing aids.
Empty wallets are not the only side effect of costly prescriptions. Nearly one in three Americans reported that they have not taken their medications as they were prescribed in an attempt to save money. By taking half-doses or skipping medications altogether, patients may take longer to recover or be left to live in pain or discomfort.
One reason Americans are left to pay more for their medications is that there is little competition between drug manufacturers. These manufacturers have all the leverage — they know patients will pay whatever they have to for potentially life-saving medications, even if the price is unreasonable.
Without competition to keep them in check, drug producers can charge exorbitant prices. It’s no wonder drug manufacturers rake in average annual profits between 15 and 20 percent while other big companies outside the healthcare industry have average annual profits near four percent. Pharmaceutical companies can even guarantee that they will not face competition by simply paying other companies not to make the same product.
Biden’s executive order could put a stop to this by calling on the Federal Trade Commission to review these “pay for delay” deals, potentially ensuring that cheaper generic drugs are allowed into the marketplace for customers. Biden also called on the Health and Human Services Administration to increase support for generic drugs to help make them more broadly available.
Additionally, Biden is continuing the Trump administration’s effort to keep prescription drug prices down by allowing easier access to international markets. Canadian drug prices are often significantly lower than prices in the U.S. Biden ordered the Food and Drug Administration to investigate ways in which importation of Canadian drugs could be streamlined in the U.S.
Beyond drug pricing, Biden is hoping to expand access to healthcare, especially in rural areas of the country where hospitals have been closing left and right. In the past decade, nearly 140 rural hospitals were closed following a merger. Additionally, these mergers often cause rural hospitals to raise prices. Some of these facilities were the only hospitals in the area. By closing, many residents now find themselves miles away from medical care or a competitor with better pricing. Telemedicine can help alleviate some of these barriers in rural America, but access to in-person care is still vital.
To address this, Biden ordered the Justice Department and the FTC to revise their merger guidelines to restrict the way in which massive hospital chains absorb smaller hospitals. By limiting mergers, rural hospitals can avoid being sold for parts by these large hospital chains that control roughly a quarter of the market. Ultimately, rural healthcare must be addressed with innovative solutions to ensure that all Americans, regardless of their address, have access to the healthcare they need.
Like Trump, President Biden’s executive orders show that he believes the best way to lower prescription drug prices is to increase transparency and competition to ensure patients have access to the best care possible at a price they could afford. These executive orders are a start, Biden must continue to pressure Congress to do its part, as well. While bickering about partisan issues, Congress has ignored several pieces of legislation that could help lower prices including policies on surprise billing and prescription drug pricing.
Jan Dubauskas is an enthusiastic insurance professional and lawyer. She is a candidate for Arizona State Senate, www.janforaz.com. Jan has more than 10 years of experience in the life and health insurance industry managing legal and operational departments for insurance carriers. She is a graduate of University of Oregon and earned her law degree from the Sandra Day O’Connor College of Law at Arizona State University, graduating as a Pedrick Scholar.
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