Guest opinion: Congress’ misguided focus on PBMs will hurt employers
Across the state of Utah, small business owners like me know the importance of being able to provide our employees with affordable health care benefits. This allows us to be competitive in the labor force, and without comprehensive, affordable benefits, we would lose out on top talent. With 92% of employees rating health care coverage as one of the most important benefits an employer can offer, rising drug prices make it significantly harder to stay competitive in today’s business landscape.
Luckily, employers have found an ally in pharmacy benefit managers (PBMs) who provide small businesses with a variety of benefit design choices and secure thousands in savings — ensuring employees have quality prescription drug coverage.
As drug prices continue to rise faster than the rate of inflation, the American people are searching for answers. However, instead of investigating the source of the problem, Big Pharma-backed policymakers are using PBMs as scapegoats for this growing crisis. When investigating an industry as complex as our health care system, I believe it is important to take a step back from the current rhetoric and look at the facts.
PBMs serve as intermediaries between payers and big drug manufacturers by negotiating discounts and rebates that save the American health care system more than $148 billion annually. Without the leveraging power of PBMs, small businesses would be at the mercy of pharmaceutical companies and their never-ending quest for increased profits.
Despite Big Pharma consistently prioritizing profits over patient well-being, policymakers in Washington, D.C., seem determined to pass misguided PBM reform, which will do nothing to lower the cost of medications and ultimately hurt their constituents. For example, inherently anti-business proposals, such as “delinking” policies, will have long-term consequences and increase governmental red tape within the health care system. Proposed legislation “delinking” performance-based incentives for pharmacy benefit companies would give Big Pharma a $32 billion windfall while increasing premiums by $39 billion annually.
Instead of passing harmful policies that interfere with the free market and hinder the essential work of PBMs, I urge Congress to focus its efforts on dismantling Big Pharma’s slew of anti-competitive tactics.
Using strategies such as “patent thickets” and “product hopping,” pharmaceutical companies successfully extend their monopolies and prevent more affordable drug alternatives from coming to market. In fact, according to research from the Foundation for Research on Equal Opportunity (FREEOP), the lack of competition in the biologic drug market will cost American patients over $30 billion between 2015 and 2029. With data like this, I am trying to understand why Congress is so focused on PBM reform rather than on the companies actively blocking competition from generic challengers.
As the health care reform debate continues, it is essential to consider the viewpoint of small businesses. PBMs are not the villains they’re often portrayed as; instead, they are crucial allies in the effort to make health care affordable and accessible. Instead of dismantling the PBM system, we should focus on increasing transparency within the drug manufacturing industry.
As a small business owner in Utah, I stand in defense of PBMs and the benefits they provide to employers across the country. Instead of wasting taxpayer dollars investigating the role of pharmacy benefit companies within the health care ecosystem, I urge our country’s lawmakers to support free-market policies that foster competition and steer clear of harmful anti-business legislation.
Derek Swanson is a small business owner in Provo.
