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The cost of prescription drugs remains one of the most frustrating parts of healthcare for Michigan families. Patients face a system that is opaque, resists change and is hostile to competition. That’s why the Mackinac Center’s recently published report, “The Free Market Remedy for Drug Pricing Ills: A Toolkit for State Lawmakers,” is important.
We worked with Naomi Lopez, one of the nation’s best experts on healthcare policy, to produce the report. Lopez is well known for promoting free-market reforms and has decades of experience, including at our sister think tank in Arizona, the Goldwater Institute. Her study offers practical, pro-growth policy reforms that would make medicines more affordable — and, importantly, without undermining the innovation that brings new treatments to market.
The report’s toolkit focuses on a simple but powerful idea: Competition benefits consumers. When drug manufacturers must compete, prices can fall dramatically. But in too many cases, lower-cost options are blocked by patent abuse, product hopping, pay-for-delay deals and regulatory bottlenecks. State policymakers can help patients by promoting faster substitution, prohibiting anticompetitive tactics, and removing outdated rules that benefit incumbents more than consumers.
The study also takes aim at another major source of frustration: pharmacy benefit managers. PBMs were supposed to help lower costs, but their growing control over the market has led to hidden rebates, spread pricing, and patient steering that drives up costs for consumers. Lopez lays out common sense reforms, such as requiring greater transparency and protecting consumer choice at the pharmacy counter.
Affordability matters to families as they increasingly pay more out-of-pocket for medicines and other forms of healthcare. High deductibles and coinsurance requirements can force patients to skip prescriptions entirely. That is why the study calls for clearer real-time pricing, stronger co-pay assistance and reforms that prevent patients from being charged based on inflated list prices.
What makes this report work is that it does not treat affordability and innovation as rivals. It recognizes that Michigan can do both: protect access today and preserve the incentives that make tomorrow’s breakthroughs possible. These types of policy ideas — which cut through special interests’ sacred cows and the bureaucracy’s precious power — are precisely what Michigan needs more of.
