Everyone Debates the Bill. We Ask Why It’s So High.

By ALDP Co-founders Michael Glassner and Jason Young

July 15, 2026 – Everyone in healthcare debates how to divide up the bill. We ask why the bill is so high in the first place.

That question sounds almost too obvious to ask. Yet it is surprisingly rare in today’s drug pricing debates. Most discussions begin only after the price of a medicine has already been established. The arguments then shift to insurance coverage, pharmacy benefit managers, rebates, deductibles, formularies, pharmacy reimbursement, and patient cost sharing. Those are important conversations, and each deserves careful attention. But they all begin from the same premise: the manufacturer’s price is already there, waiting for everyone else to respond.

Americans for Lower Drug Prices starts somewhere different. We begin with the price itself – not because it is the only factor affecting affordability, but because it is the starting point from which every other financial decision in the prescription drug system flows.

One reason that starting point receives so little attention is a widely repeated assumption that list prices are largely fictional. We are often told that almost no one pays them, that they disappear into a maze of rebates and confidential negotiations, and that they therefore have little practical significance. That assumption has become so common that many policymakers now treat the list price almost as an accounting exercise rather than a number with real-world consequences.

The Reality Is More Complicated

For uninsured Americans, the list price is often the price. There is no insurer negotiating on their behalf and no rebate waiting at the pharmacy counter. Millions of Americans are also enrolled in high-deductible health plans, where they remain responsible for much or all of their prescription costs until their deductible has been met. Many chose those plans because they were the only coverage they could afford. Patients whose plans require coinsurance frequently pay a percentage of a drug’s price, even when confidential rebates later reduce what the health plan ultimately spends. And employers – particularly small businesses – may never purchase a medicine at its list price, yet they experience its effects every year through rising premiums and increasingly difficult decisions about wages, hiring, and employee benefits.

The point is not that every American pays the list price directly. Clearly they do not. The point is that the list price is far more consequential than many healthcare debates acknowledge. It reaches patients directly, shapes what employers spend to provide coverage, and influences financial decisions throughout the healthcare system.

That matters because healthcare policy has become remarkably sophisticated at managing the consequences of high prices. We debate how to finance them, insure them, rebate them, negotiate around them, and distribute their costs among employers, taxpayers, insurers, and patients. Those discussions are necessary. But they can also obscure a more fundamental question: how did the price become what it is in the first place?

This is not an argument that pharmaceutical manufacturers bear sole responsibility for every problem in healthcare. PBMs deserve scrutiny, as do insurers, hospitals, pharmacies, and government programs when they fail patients. Every participant in the system should be accountable for the role it plays.

Nor is this an argument against innovation. New medicines have transformed countless lives, and genuine future breakthroughs deserve both celebration and appropriate reward.

It is, however, an argument against treating the manufacturer’s price as though it were beyond examination. Every participant downstream responds to that number. Patients make decisions because of it. Employers make decisions because of it. States and the federal government make decisions because of it. When the starting point shapes so much of what follows, it is reasonable to ask how that price was established, whether it is sustainable, and whether it serves patients as well as innovation.

The System Is Not Inevitable

We have reached a moment when those questions are becoming more urgent, not less. The financial pressures on Medicare, state budgets, employers, and families are no longer abstract projections. They are today’s reality, and they will shape tomorrow’s policy choices. Too often, those choices are presented as though they involve only two options: asking taxpayers to contribute more or asking beneficiaries to accept less. Better stewardship – the careful and efficient use of healthcare dollars – deserves equal consideration. It is difficult to imagine a more important place to begin that conversation than with one of the largest and fastest-growing components of healthcare spending.

There is another misconception that deserves to be set aside. Just as it is mistaken to believe that list prices are largely irrelevant, it is equally mistaken to believe that our current pricing system is somehow inevitable. It is not. Markets evolve. Competition changes. Public policy changes. Transparency changes behavior. Negotiation changes outcomes. We have already seen evidence of each. None is a complete solution by itself, but together they remind us that today’s pricing system is the product of human decisions, not the laws of nature.

Americans for Lower Drug Prices was founded on a simple conviction: before we decide how to divide up the bill, we should understand why the bill is so high in the first place. We believe that asking that question is neither anti-market nor anti-innovation. It is an act of stewardship on behalf of patients, taxpayers, employers, and future generations who will inherit the healthcare system we choose to build.