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Alabama employers sound the alarm on policies targeting prescription drug benefits

Employers signed a letter to members of the congressional delegation urging Congress to oppose policies targeting Pharmacy Benefit Managers.

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Recently dozens of employers signed a letter to members of the congressional delegation urging Congress to oppose policies targeting Pharmacy Benefit Managers (PBMs). The employers write: “Our ability to offer quality, competitive coverage, and continue to rely on significant savings hangs in the balance. Going forward, Congress must continue to recognize the disastrous consequences of government intervention targeting pharmacy benefits that would increase costs for employers, taxpayers, and consumers, while boosting profits for Big Pharma — and reject these pharma-backed proposals if they resurface in the future.” 

Recent Alabama employers, such as highlighted in the Alabama Political Reporter, have expressed concerns over legislation targeting pharmacy benefits and have urged Congress to oppose such policies that would make it more difficult for them to offer benefits to their employees and their families. 

Big Pharma seems to be pushing for overregulation of PBMs to boost their own profits and Big Government is using policies targeting PBMs as a way to advance a universalized health care system. 

PBMs continue to come under fire because Big Pharma has implemented a multi-million dollar blame game to use PBMs as a scapegoat to boost their own profits. PBMs are the only real check against drug companies, so when their ability to negotiate with drug companies is undermined, Big Pharma stands to gain. 

Politicians on the Left have used the increased appetite for prescription drug reform, and the false blame game against PBMs, as an opportunity to expand the government’s role in the health care system and undermine the free market.

Republicans siding with these policies could hurt their chances in the election this year. The Washington Examiner wrote, “Advancing such legislation could hurt the chances of Republicans in the upcoming election cycle, others argued, with at least one GOP Senate campaign staffer pointing to internal polling that showed candidates dealing with drug prices was a top issue for voters heading into 2024. ‘Not a single Republican voter is asking the House to pass a PBM bill,” the staffer said. “This is driven by pharma lobbyists, it’s bad politics and policy, and it will hurt us next fall.’” 

Both Big Pharma and Big Government stand to gain from legislation targeting pharmacy benefits and continue to push for these proposals despite the unintended negative consequences, particularly to employers. Employers would be the ones to suffer if legislation targeting pharmacy benefits are implemented, making it harder for them to offer affordable, quality prescription drug benefits. 

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PBMs help employers offer quality, affordable prescription drug benefits by providing them with the necessary flexibility and range of options to design the best plan possible for their unique needs. Competitive Enterprise Institute senior fellow Joel Zinberg explains that, “PBMs are a free market solution that enhances competition through group purchasing and negotiated discounts that provide substantial economic and health benefits for consumers and taxpayers.” 

Legislation being considered includes banning market-based incentives for PBMs successfully securing rebates from drug companies which would lead to increased health care costs, and even more profits for Big Pharma. 

So-called “delinking” policies in the commercial health insurance market, which is employer-sponsored coverage, would increase health care premiums by more than $26 billion annually. Big Pharma would get nearly $22 billion annually in boosted drug profits if “delinking” was implemented. 

Policymakers also want to ban spread pricing, which does nothing to lower costs but take away a valuable choice health plan sponsors have when it comes to designing their prescription drug benefit. Spreading pricing provides plan sponsors with price predictability, which for small businesses and startups are vital. 

Legislation touted as “transparency” actually just helps drug companies collude to undermine competition and boost their own profits. These various bills being considered undermine the free market, restrict choice, and undermine competition, leading to increased health care costs and our country closer to a Medicare-for-all type health care system. 

The groups more affected by these policies are employers who rely on PBMs to be able to stay competitive in the labor market by being able to offer the best health benefits possible, which includes prescription drug benefits, which is why Alabama employers are sounding the alarm. 

Alabama lawmakers have the opportunity to show their support for business owners across the state, and the free market we stand for, during an upcoming House Oversight Committee hearing, where the committee will undoubtedly spew Big Pharma’s talking points against PBMs, and oppose efforts to undermine actors in the prescription drug supply chain encouraging greater competition and securing significant savings for patients, employers and taxpayers. 

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The Alabama Political Reporter is a daily political news site devoted to Alabama politics. We provide accurate, reliable coverage of policy, elections and government.

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