The Biden Administration Drops Its Foolish Resistance to Drug-Price Transparency


A mericans finally have some good news on health care. After years of skyrocketing costs, lower prescription drug prices are coming — despite President Biden’s efforts to force Americans to keep paying more.

That’s a victory our organization won last week in federal court. Earlier this year, we sued the Biden administration for its refusal to implement price transparency for prescription drugs. In 2020, the Trump administration finalized a regulation requiring group health plans and many health-insurance issuers to disclose the price of prescription drugs to consumers.

This policy — which has the force of law — is a no-brainer. Transparency helps patients compare prices, save money, and avoid surprises, all while pressuring the health-care system to lower prices for everyone.

But the Biden administration ignored the law. At first, it refused to enforce the policy by saying it needed to weigh complaints from health-insurance companies, which hate transparency. (Health-insurance companies donated to Joe Biden over Donald Trump by a nearly four-to-one margin in the 2020 election.) The Biden administration eventually delayed enforcement of the policy indefinitely, despite its being on the books.

President Biden publicly threatened prescription-drug makers while enacting price controls on a handful of medications. It allowed him to have his cake and eat it too; he looked tough on drug pricing in a few instances without tackling soaring prices overall. What’s more, price controls are a proven way to stifle medical innovation, killing an estimated 130 drugs and cures and ultimately jeopardizing patients. Transparency has no such downsides. It spurs the competition that lowers prices and encourages innovation.

President Biden’s lack of leadership has already caused drug prices to soar. Between 2021 and 2022, more than 1,200 prescription drugs saw prices rise faster than inflation. If the Biden administration had enforced the law, Americans would already be saving untold billions of dollars on prescription drugs.

Fortunately, relief is finally on the way. In response to our lawsuit, the Biden administration has completely withdrawn its policy of nonenforcement. From now on, health-insurance providers will have to provide the prices they negotiate with hospitals and doctors’ offices for prescription drugs, as well as how prices have changed over the years. Patients will be able to compare options to see who charges the least, saving them money.

Americans shouldn’t have had to wait this long for price transparency on prescription drugs. It’s also true that families would benefit even more from stronger reforms. It’s good that the Biden administration is finally following the law, but it would be even better if Congress passed more laws giving families greater information and empowering them to make better decisions to save money while improving their health.

The next step in price transparency is giving patients transparency on how much health-care services actually cost. Specifically, they need to know when health insurance charges more than patients would pay in cash.

Congress has taken baby steps in the right direction, passing bipartisan reforms in 2018. Today, if a medication costs just $40 but an insurance company charges more — say, $285, which actually happened — then a pharmacy can tell the patient about the lower price. That’s great. But it would be even better if patients received the same honesty and transparency about every part of health care, from surgeries to lab tests.

Families would save extraordinary sums. Studies show that cash prices at hospitals are lower than insurance charges nearly 90 percent of the time. More than 40 percent of the time, cash prices are lower than the cheapest insurance charge. Instead of having to hunt for savings, patients should be given savings on a silver platter. And if patients choose the lower cash price, Congress should ensure that it applies toward their in-network deductible. Many families face an out-of-pocket maximum of up to $18,200. They deserve the chance to pay much less.

Congress should empower Americans with the truth about health-care prices, without exception. It’s good that the Biden administration is now enforcing the law on drug transparency, though it shouldn’t have taken a lawsuit. Now lawmakers shouldn’t waste time before making all of health care more affordable for families.

Tarren Bragdon is CEO of the Foundation for Government Accountability. Stewart Whitson is legal director of the Foundation for Government Accountability.