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Guest opinion: Congress, hold the line against new government mandates

By Van McCarlie - | Apr 6, 2024

Congress made the right call recently by not including harmful government mandates that affect our pharmacy benefits in the most recent spending package. Anyone who owns their own business can tell you how important it is to offer competitive benefits to keep employees around and incentivize new workers to join, and Congress not taking up additional pharmacy benefit managers (PBM) legislation shows they also think it’s important.

Especially in today’s society where the labor market is highly competitive and there are not enough available workers to go around, it is critical for a business to be able to offer the best, most affordable health care coverage they can.

Despite the desperate need to protect employers and their ability to offer such benefits, certain lawmakers — mainly the extreme left — have become fixated on passing legislation that would allow the government to dictate what kind of benefits we can offer by targeting our pharmacy benefits. Even though the spending debate has passed, we know some members will continue to push for these kinds of proposals.

PBMs provide savings for businesses and their employees, which is why employers choose to hire them. As Ike Brannon, senior fellow at the Jack Kemp Foundation, explains:

“PBMs represent their clients in negotiations with pharmaceutical companies. These insurers, governments, and the like choose to engage with PBMs because they have the ability to obtain significant discounts. PBMs typically have numerous clients, which affords them extensive experience in negotiations. What’s more, their breadth and depth of clients give them market power, allowing them to extract substantial discounts from pharmaceutical companies.”

Without PBMs negotiating on behalf of health plan sponsors, we would be left alone to stand against Big Pharma companies, which would be a losing battle. Drug companies already have the power to set the price of drugs to whatever they want, and we are lucky we have pharmacy benefit companies in the supply chain working to negotiate discounts or rebates on our behalf, allowing us to secure savings on prescription drug costs.

Employers typically use these rebates to help their employees and their families. In fact, a national survey of employers actually found that “90% of employers who receive rebates from PBMs use those rebates to the benefit of employees, including lowering employee spending on benefits and enhancing coverage.”

Congress is considering policies that will undermine how these savings are secured and passed down to health plan sponsors. As Brannon explained in a recent white paper, federal-level legislation that bans spread pricing, “delinks” market-based incentives for PBMs, demands rebate pass-through and requires PBMs to disclose proprietary, sensitive information “will not help patients, and it would very likely raise costs.”

These policies do nothing but take away choices from health plan sponsors when they design their pharmacy benefits. Health plan sponsors like me have the choice of what kind of benefits we offer our employees, and taking away one option does nothing but restrict our options and increase costs. In fact, one expert found that the proposed “delinking” policy alone would raise health care premiums in the commercial health insurance market $26.6 billion every year. Unsurprisingly, Big Pharma would stand to gain a staggering $21.9 billion in increased drug profits through such a policy.

Business owners across Utah are counting on our lawmakers to continue to stand up for our benefits by rejecting proposals that target PBMs. Congress should remain focused on market-based solutions to lower drug prices, not government mandates that restrict health plan sponsor choices and raise costs.

Van McCarlie is a small-business owner based in Provo.


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