September 14, 2023

Michigan State Senate

Lansing, MI 48909

Dear Senator,

On behalf of the 55,548 members and supporters of the Council for Citizens Against Government Waste (CCAGW) in Michigan, I urge you to oppose SB 483, a bill to establish a Prescription Drug Affordability Board. Throughout history, price controls have distorted markets, hurt innovation, and exacerbated the problems they intended to fix.

SB 483 includes provisions that would create a five-member Prescription Drug Affordability Board appointed by the governor with the advice and consent of the Senate. The legislation also establishes a stakeholder council with 21 members.

The legislation authorizes the board to review an unlimited number of drugs based on parameters determined by the wholesale acquisition cost (WAC) of the drug. WAC is an estimated list price and does not represent what a patient will pay at the pharmacy after negotiations have occurred among pharmaceutical companies, insurers, pharmacy benefit managers, and pharmacies to lower out-of-pocket costs for patients. The board would have full authority to act if it determines that a drug price is “too high,” and establish an upper payment limit. These price controls will further distort the medical marketplace and expand government control of the Michigan healthcare system. This bill will also fail to reduce prices and harm patients by stifling the development of new treatments and cures.

Instead of imposing damaging price controls, legislators should contact Michigan’s federal representatives and encourage them to hold the Food and Drug Administration’s feet to the fire for faster generic drug approvals and create an environment that encourages more “me too” drugs that will foster competition among branded pharmaceuticals that are in the same class and still under patent. A permanent market-based solution will lower prices, not more government intrusion. For the above reasons, I urge you to oppose SB 483.

Sincerely,

Tom Schatz

President, CCAGW