By Zack Gottshall
Healthcare costs are soaring across the United States and they are especially punishing in Alaska. Healthcare services in Alaska’s largest cities cost roughly 50% more than in other major U.S. metros, and our state ranks second nationally in per-capita health spending, despite ranking far lower in per-capita income. That mismatch helps explain why more than a quarter of Alaskans say they are worried about affording care in the coming year.
Prescription drugs are a major part of that burden, particularly for rural Alaskans who already face limited pharmacy access, higher transportation costs, and fewer alternatives when prices rise.
Fortunately, Congress has several opportunities in 2026 to reduce drug costs for Alaskans, but only if lawmakers focus on reforms that lower
prices without undermining access or innovation.
One clear place to start is the 340B Drug Pricing Program, which Congress created more than three decades ago to help low-income and rural hospitals stretch scarce resources. Lawmakers originally expected the program to be small, serving a limited number of safety-net providers that would use drug discounts to expand charity care.
But Congress never required hospitals to pass those discounts on to patients, nor did it establish strong guardrails around eligibility.
Over time, large and financially strong hospital systems have entered the program and exploited those gaps. Today, more than 2,600 hospitals participate, and many routinely purchase deeply discounted drugs through 340B only to resell them to insured patients at full price, sometimes marking them up several times over.
The scale of the problem is enormous. According to the Congressional Budget Office, spending through the 340B program grew nearly 20% per year between 2010 and 2021, rising from $6.6 billion to $43.9 billion. That growth has only accelerated. In 2024 alone, hospitals and other covered entities purchased more than $81 billion in drugs through the program.
For Alaskans, this misuse of 340B translates directly into higher insurance premiums and higher out-of-pocket costs, even when drugs are acquired at steep discounts. Congress could deliver immediate relief by tightening eligibility rules, increasing transparency, and ensuring that 340B discounts actually reach patients, rather than being absorbed by hospital systems.
Another major driver of high drug prices is the growing power of pharmacy benefit managers, the middlemen that manage prescription drug benefits on behalf of insurers. Today, the top three PBMs control more than 80% of the market, giving them enormous influence over which drugs are covered and what patients pay.
PBMs often profit when prices are high, since their compensation is frequently tied to rebates and fees based on a drug’s list price. That
creates incentives to steer patients toward more expensive medicines, even when cheaper, equally effective alternatives exist. The result is
higher copays, higher premiums, and fewer real choices for patients, particularly in states like Alaska where pharmacy competition is
limited.
Congress has taken initial steps toward transparency, but lawmakers could go further by delinking PBM compensation from drug prices, removing the incentive to favor higher-cost drugs and allowing market competition to work in patients’ favor.
At the same time, Congress must be careful not to pursue policies that would ultimately make the problem worse, especially proposals that
import foreign price controls into U.S. law.
The United States develops most of the world’s new medicines, while many foreign governments use price controls to force manufacturers to sell those drugs at artificially low prices. The cost of that innovation is then shifted onto American patients, including Alaskans, who pay more to subsidize patients in other wealthy countries.
President Trump has made ending this imbalance a priority by pressing trading partners to pay more market-based prices for medicines. When other countries contribute more fairly, drugmakers gain flexibility to reduce prices in the U.S. without cutting back on research, development, or access. That matters enormously for Alaska, where reduced investment or fewer drug launches would hit rural and remote communities first.
Congress should support those efforts, not undermine them by tying U.S. drug prices to the lowest prices set by foreign governments. Doing so would hand pricing authority to foreign bureaucrats who know nothing about Alaska’s geography, healthcare challenges, or patient needs. It would also weaken the United States’ ability to push other countries to pay their fair share, locking Alaskans into a system that discourages innovation and risks limiting access.
Alaskans are right to be concerned about healthcare affordability. Congress can deliver real relief by cracking down on hospital and middleman practices that inflate drug prices and by rejecting foreign price controls that would shift costs and risks onto American patients.
If lawmakers stay focused on patient-centered reforms that reflect Alaska’s unique realities, families across the state can see meaningful progress in 2026. And Alaskans should urge their federal delegation to pursue solutions that lower costs without sacrificing access, innovation, or local control.
Zack Gottshall is a retired U.S. Army Intelligence Officer, a Commissioner on the Alaska State Commission for Human Rights, Vice President of the Taku/Campbell Community Council, and a small business owner in Anchorage.
