Washington is increasingly tapping a hidden “piggy bank” to fund its growing healthcare commitments. Proponents of this strategy proclaim that it doesn’t cost taxpayers a dime, but that’s an illusion. It’s quietly draining one of America’s most important industries — and threatens to degrade millions of Americans’ health while greatly increasing future healthcare spending.

Each year, policymakers force prescription drug manufacturers to transfer tens of billions of dollars to hospitals and other providers (mostly clinics) through mandatory rebates and discounts. These transfers don’t come out of the federal treasury or show up as a line item on the budget, so most Americans have no idea this is happening. And policymakers are perfectly happy to keep it that way.