Members of both political parties agree that keeping life-saving prescription drug prices reasonable saves lives; however, there is an ongoing debate about the best way to accomplish this goal. 

For many Democrats, government-imposed price controls are the solution. This past legislative session, they passed Assembly Bill 250, which would prevent the major drug manufacturers from inflating the cost of our prescription drugs by having the government set these products’ prices. 

Republicans, on the other hand, argue that promoting marketplace competition is a more effective solution than more government. That’s why Gov. Joe Lombardo rightly vetoed this bill. 

Regardless of where one falls on the political spectrum, everyone in this state should agree that regulating away the private market entities that help restrain the drug companies’ ability to rig prices higher shouldn’t be the answer. And yet, that’s exactly what the drugmakers are telling them to do.

Predictably, the major pharmaceutical companies fought AB250 tooth and nail, labeling it government overreach. However, those same drug companies that rallied Lombardo and the Republicans in the Legislature to stop this so-called regulatory overreach asked them, as well as Sens. Catherine Cortez Masto and Jacky Rosen, to use the force of government to stop groups known as pharmacy benefit managers (PBMs) from operating in the state. This would be a disastrous mistake.

PBMs serve an essential role in the Nevada health care industry. They are hired by health plan sponsors, including government health plans that Nevada’s comptroller’s office administers, to mitigate the ever-increasing cost of drugs. 

PBMs do this through various means, including negotiating discounts and rebates with drug manufacturers, implementing tiered formularies that encourage the use of cost-effective drugs and managing high-cost specialty medications. Essentially, PBMs act as intermediaries between the providers of our health care and the drug companies, leveraging their vast patient pool to bargain for better prices. 

It shouldn’t surprise anyone that the major drug companies, which want to keep their prices as high as possible, don’t like them. They contend that PBMs pocket too much of their cost-savings and are doing Nevada consumers a disservice. This narrative is not true, and everyone paying attention knows it.

Dave Walker, who dealt with PBMs when he served as the United States comptroller general under Presidents Bill Clinton and George W. Bush, wrote that anti-PBM regulations don’t adequately consider the Government Accountability Office’s findings on how these entities successfully reduce entitlement spending. Another study shows that PBMs’ effort in promoting lower-cost drugs has resulted in billions in savings during the past decade. The study found that they account for a mere 6 percent of the cost of a drug, while manufacturers account for 65 percent.

Given this information, why would any Nevada lawmaker even consider using government power against PBMs?

In sharp contrast to the PBMs, Pharmaceutical Research and Manufacturers of America (the drug manufacturers’ principal trade association) operates with the goal of protecting the interests of its member companies. While its work advocating for the development of new treatments and cures for the American people is crucial, it also heavily lobbies for policies that maximize member revenues, which generally translates into higher drug costs for consumers.

As someone with firsthand experience dealing with health plans, Walker has seen how PBMs positively control drug costs and how these savings impact patients’ lives, especially those managing chronic conditions. Seeing major drug companies demand that lawmakers regulate PBMs, while at the same time decrying new regulations on drug manufacturers, is pure hypocrisy.

At a time when we face the dual challenges of an aging population and rising health care costs, it’s more important than ever for us to bolster systems that work to make health care more affordable. PBMs are one of these systems, and they’re needed now more than ever.

James Smack is the chief deputy controller for Nevada and a former Republican national committeeman for the state.