One of the many provisions in the Inflation Reduction Act is new statutory authority for the federal government to essentially impose price controls on a number of pharmaceuticals in high demand.

Late last month the Biden administration announced the first ten drugs that would be subject to these price controls, and the affected companies quickly filed a lawsuit to stop this action. The government’s attempt to impose price controls is somewhat ironic, given that the Biden Administration has been attempting to undercut the ability of pharmacy benefit managers to constrain drug prices on behalf of their clients. If the administration’s goal is truly to constrain prescription drug prices, it would cease its battles against PBMs and pursue legislation that would allow them to be more transparent in negotiating cost discounts.

PBMs represent insurance companies, unions, large employers, and governments in negotiations with pharmaceutical companies. The patent system provides a monopoly to drug companies in the sale of new drugs. The market power PBMs accumulate helps them to negotiate with the monopolistic pharmaceutical companies: They offer access to their entire formulary that stretches across millions of patients in return for a price discount. If the pharmaceutical company is unwilling to negotiate, the PBM can offer other, similar drugs to the patients covered by its clients instead. (It’s worth noting that they have negotiated lower prices already for the drugs on the government’s price control list.)

Pharmaceutical companies do not like being confronted with someone else’s market power, and they have gone to great lengths to label PBMs as mere middlemen who are to blame for high drug prices instead of them. It is a risible claim: A wealth of evidence shows that PBMs can be quite effective at putting downward pressure on prescription drug prices. The market power of PBMs offsets that of the drug companies.

A primary complaint that the government and others have made is that PBMs obtain rebates rather than explicit price reductions from their negotiations, which politicians and pharmaceutical companies like to imply is merely a kickback that PBMs pocket. However, a depression-era law called the Robinson-Patman Act requires that PBMs negotiate rebates instead of lower prices: The government could simply change the law to exempt PBMs from this outdated law (which serves no useful economic purpose) and provide more transparency to the price negotiation process.

Some politicians also object to the practice of PBMs pushing for the direct delivery of prescription drugs to the patients’ homes rather than have them pick them up from their local pharmacy. Such an objection lays bare the real problem politicians have with PBMs, which is that key constituents—in this case independent pharmacists—make less money because of PBMs. The direct delivery of drugs should be something that the government insists upon: Not only does it reduce costs but it also greatly increases drug adherence. People can and do forget to pick up their drugs at the pharmacy, and the direct delivery of drugs improves health outcomes and saves the government billions of dollars a year, health economists have estimated.

However, the exact opposite has occurred, and several states have passed laws (or attempted to do so) that would severely restrict the direct delivery of prescription drugs.

Pretending that PBMs are mere middlemen that provide no useful services and are to blame for high drug prices is disingenuous; doing so while discouraging the direct delivery of drugs is morally bankrupt. Drug prices are high because it costs a lot of money to develop new drugs, and other countries effectively piggyback off the investment financed by the U.S.

There is no magic bullet that will change this calculus. Undermining the ability of PBMs to negotiate lower prices so that the government can do it instead will not benefit consumers or improve health outcomes.