Nomination #2: 2026 MHF Defender Award

Medications can be expensive, and state lawmakers would love to fix that. Today we have nomination #2 for the 2026 MHF Defender Award. You can read the first nomination here.

Michigan Senate Bills 3-5 came to the Finance, Insurance, and Consumer Protection Committee on April 23, 2025.

Discussion centered on SB 3 creating a Pharma Drug Affordability Board. A PDAB would follow complex formulas to control pharma prices. Other states have PDABs, Michigan should, too.

SB 4 would require all insurance plans to comply.

SB 5 would require all Medicaid plans to comply.

Amid all these plans, Sen. Theis asks what states do that actually reduces medication costs for patients.

Watch how this lobbyist ducks the question. It’s so blatant that the chair steps in.

Seriously, what works?? We’d all like to know.

The answer is: none of it.

Despite years of regulatory buildup and millions spent by states attempting PDABs, all efforts have failed to save patients money through medication price controls.

So now these bill proponents demand even tighter regulation. An Upper Payment Limit, they say, is all that’s needed to really deliver lower patient prices for medications.

Blame-shifting

In the world of expensive healthcare, the Big Three do a fair amount of blame-shifting. Hospitals point at pharma, pharma points at hospitals. They both point at insurance, which vigorously throws it back.

This is instructive, because there are elements of truth in all their accusations. My Dad used to say, “Figures don’t lie, but liars figure” – so there’s that, too.

This hearing is a classic example of all of the above. (Full video: 66 min.)

As you try to sort facts from spin, don’t miss the Pharma representative’s testimony. Three significant points near the 30-minute mark:

Only 49% of drug price costs go to the manufacturer.
Insurers and PBMs determine the patient’s out of pocket price at the counter.
… they are paying less due to the discounts and rebates, but then still charging full price to the patient.

The Bottom Line

Our first mistake was expecting insurance to cover every little thing. It was inevitable that they would try to weasel out of big things.

The second (really stupid) thing was cutting ourselves out of real medication decisions. The MHF video series Get Smart with Pharma shows how to slice through inflated prices.

The fact of the matter is, consumers are far more effective than policy-makers at dropping prices. No matter how well-intentioned lawmakers, regulators, and lobbyists may be, more healthcare law usually makes healthcare more expensive.

Regulatory or compliance costs add administrative burden totaling 15-25% of US healthcare costs. That’s in addition to price increases due to special interest laws leveraging industry profits.