In a recent op-ed discussing health care and inflation, AARP’s West Virginia chapter called for a Medicare “negotiation” scheme to address prescription drug prices. This tired proposal would be disastrous for pharmaceutical innovation – and, ultimately, for the seniors the AARP claims to represent.
Medicare negotiation is tantamount to government-imposed price controls, forcing manufacturers to set prices on certain medications at the government’s direction or face a 95 percent excise tax. And while the AARP leaned on Sen. Joe Manchin’s reputation to make their case, the proposal is anything but moderate. In fact, the scheme was central to House Speaker Nancy Pelosi’s H.R. three price-setting legislation and found a home in President Joe Biden’s far-left Build Back Better plan.
By supporting Medicare “negotiation,” AARP is endangering future innovation and access to care while potentially benefitting big health insurers and Pharmacy Benefit Managers (PBMs) like its corporate bedfellows UnitedHealth and its wholly owned PBM subsidiary OptumRx. Under Medicare “negotiation,” these companies could see a financial windfall, with the government’s market-distorting price-setting increasing their profit margins.
So why would AARP side with big insurance concerns and support policies that could reduce the future availability of cures for diseases like Alzheimer’s? The organization’s publicly available financial records is creating some speculation.
AARP’s main financial benefactor is none other than UnitedHealth – the largest health insurance company in the U.S. The senior “advocacy” organization pulled in an astounding $11 billion from its sales and marketing activities over the past decade, with revenues climbing from just under $200 million in 2001 to more than $1 billion in 2020. In 2017, the last year AARP voluntarily reported it as a line item, 69 percent of AARP’s royalty payments were derived from its relationship with UnitedHealth – dwarfing the annual revenues AARP derives from dues-paying seniors.
Does this lucrative relationship explain why AARP opposed one of President Trump’s Medicare reforms that would have applied discounts to seniors’ prescriptions at the pharmacy counter – discounts that OptumRx and other PBMs currently pocket.
So, when it comes to AARP’s support for government price controls, seniors – and policymakers – should ask themselves: who is AARP advocating for?
Jon Decker
Washington, D.C.