PBMs prevent increases in healthcare costs
When North Carolina lawmakers enter the 2023 session in January, they may consider policies to address health care costs. But as we have often seen, “fixes” that rely on government intervention are often wrong, resulting in price controls and overregulation that distorts the medical marketplace. Free market competition, not government interference, is the best solution to lower prices in health care and other industries.
Health care costs are not a new topic. Time and time again, failed experiments have shown that government interference with private sector agreements in health care does not produce any positive results. But there is already a private sector solution. Today, more than 65 pharmacy benefit managers, or PBMs, serve more than 266 millions of Americans who get their health insurance from employers, unions, state governments, insurers and other groups. This number continues to grow, as inflation and rising costs have made the savings and efficiencies that PBMs provide increasingly essential. Research has found that restricting PBMs would cost patients an average of $962 annually.
PBMs provide value by creating pharmacy networks and formularies, helping patients take their medications as prescribed, operating specialty pharmacies, providing home delivery options, and conducting audits to prevent drug cost increases and prevent fraud. . PBMs also negotiate with the large pharmaceutical companies that set drug prices, to avoid cost increases for PBM customers. Employers, including small businesses, looking to offer competitive healthcare benefits to employees and their families choose to use PBM because of the many essential benefits and cost savings.
However, more restrictions on employers’ pharmacy benefits, such as imposing pricing requirements, seeking rate regulation, interfering with private contracts, or restricting choice that help employers have more choice and access to pharmacy coverage affordable drugs, would limit the ability of employers to provide benefits that work. for your employees. This results in higher business costs and also higher costs for patients. Government interference in these private sector contractual arrangements would make doing business in North Carolina more difficult and put power over patient care in the hands of government bureaucrats. This can only hurt patients, families and taxpayers. The North Carolina legislature should avoid this approach.
There have also been federal efforts to disrupt the private sector healthcare market and the success of PBMs. S 4293, the Pharmaceutical Benefit Managers Transparency Act of 2022, which would have imposed unnecessary price controls and regulations on pharmacy benefit managers (PBMs), increased drug costs, not reduced them, and hurt patients and their families. Fortunately, this legislation did not pass in either the Senate or the House. Efforts to control private sector negotiations of PBMs shift power away from patients and into the hands of the government. Price controls of any kind reduce competition and result in higher costs for everyone.
As lawmakers start a new session, they must remember their promises to make government more efficient and less intrusive and to protect the constituents they serve. Health care is a personal decision to be made by individual patients, not the government, and efforts to regulate those decisions and distort the medical marketplace leave patients and their families with fewer options and put health care choices in their hands. wrong.
Christina Smith is director of health policy and science at Citizens Against Government Waste, a nonprofit, nonpartisan organization representing more than one million members and supporters across the country with a mission to eliminate waste, mismanagement and inefficiency in government.