Health Insurance CEOs

 WM: Health Insurance CEOs, January 22, 2026

Please allow me to share an option that the CEOs who testified do not want you to consider.

The research and development costs of orphan drugs lead to higher prices for drugs provided to patients and through healthcare providers - including those cases where they are included on an unpayable bill which will eventually be discharged in bankruptcy - or even worse actually paid by the uninsured - and which raises premiums paid by employers and employees to counter absorb a portion of these costs.

The Biden Administration’s Budget cites PhARMA profits as a rationale for increasing business income tax rates.  He proposes raising Tax Rates for Large Corporations. PhARMA’s excuse for high prices is for developing orphan drugs. We have a proposal to solve that problem.

PhARMA justifies its profits because it is burdened with high development costs for new and orphan drugs. We renew our call for a more “corporate approach” for government research and testing of new drugs.

Part of ARPA-H is the funding for research on orphan drugs and the lingering problem of their cost once research leads to product development. In comments to Senate Finance on March 16th of this year, we repeated our proposal in this area for NIH to retain ownership in any such drug and contract out its further development and manufacture. Keeping ownership in public hands ends the need for drug companies to charge extreme prices or increase prices for its existing formulary to fund development. 

PhARMA would still make reasonable profit, but the government would eat the risk and sometimes reap the rewards. NIH/FDA might even break even in the long term, especially if large volume drugs which were developed with government grants must pay back a share of basic research costs and the attached profits, as well as regulatory cost.