ALEC Compromised by Drug Industry Cash

The American Legislative Exchange Council has been bashing the 340B Drug Discount Program lately. Why a group ostensibly focused on pushing for conservative laws in state capitals is concerned with a federal healthcare program has everything to do with one of its largest secret donors: Big Pharma.

Between 2017 and 2021, the Pharmaceutical Research and Manufacturers of America trade association showered ALEC with $504,000, according to reporting by the Center for Media and Democracy. Not accidentally, “PhRMA has held a seat on ALEC’s Private Enterprise Advisory Council for decades,” says the Center.

Not surprisingly, ALEC can’t seem to get its facts right about 340B.

1.   340B is not taxpayer funded. It was designed by Congress as a revenue stream for safety-net hospitals to stretch resources to help care for patients who cannot afford to pay. It is funded entirely by the drug industry, which hates supplying 340B discounts because they bite into its bloated profits. Further, insurers and employers would not see a decrease in drug prices if 340B vanished tomorrow. Why? Because drug companies would step in and recoup their full wholesale price for medicines, leaving no savings for anybody.

2.   340B is not raising the cost of healthcare. Big Pharma will point the finger at anybody else on Earth rather than admit that skyrocketing drug prices have a heavy impact on American healthcare expenses. The industry raises prices TWICE each year and every year.

“Over the period from January 2022 to January 2023, more than 4,200 drug products had price increases, of which 46 percent were larger than the rate of inflation,” says a report from the Department of Health and Human Services. “The average drug price increase over the course of the period was 15.2 percent, which translates to $590 per drug product.”

ALEC is well paid by the price-raising drug industry to spread such disinformation. Don’t be fooled. Ignore the group’s compromised messaging.