Lawmakers should protect Florida business by protecting pharmacy benefits
The implementation process for The Prescription Drug Reform Act (SB 1550), passed by the Florida Legislature this year, has started. While certain provisions of this law took commendable steps to hold big drug companies accountable for profiteering practices, other aspects of the law targeting pharmacy benefits pose substantial risks for Florida employers — including the Hispanic-owned business community that contributes $90 billion annually to the Florida economy.
Overreach in the implementation of the bill, or additional policies that further undermine pharmacy benefits, threaten to restrict the cost-saving options businesses count on to offer better quality and more affordable prescription drug coverage to employees.
While the full consequences of state policies targeting pharmacy benefits remain to be seen for Florida businesses, Congress is considering regulations that would go further and have disastrous effects on employers and patients.
Like SB 1550, the federal proposals aimed at pharmacy benefit managers (PBMs) would impact the pharmaceutical supply chain in unforeseen ways. These policies could limit the methods through which patients can secure their prescriptions and the health insurance options business owners are able to offer.
Employers are under no obligation to hire PBMs, but a majority choose to because of the savings and flexibility they offer. For employers, like the 604,000 Hispanic-owned businesses in the Sunshine
State, the number of options at available through a PBM is critical. We should be empowering business owners and making their lives easier, not limiting their options.
The charge to undermine pharmacy benefits is being led by some of the most visible opponents of the pro-growth, pro-business power of the private sector, including U.S. Sen. Bernie Sanders and Federal Trade Commission (FTC) Chairwoman Lina Khan.
The approach they are advocating for would do nothing to lower prescription drug costs, while restricting employers’ ability to offer high-quality, affordable health coverage to their employees and their families. For minorityowned businesses, like the ones I work with at the Florida State Hispanic Chamber of Commerce, this would be devastating.
Matrix Global Advisors founder and economist Alex Brill recently published a paper on the critical role PBMs play in the pharmaceutical supply chain and explained why employers use them:
“Given the burdens and complexities of managing a pharmacy benefit, most payers opt to hire a PBM, which also allows payers (and by extension their members) to benefit from the leverage in price negotiations that PBMs gain from representing multiple payers.
“But PBMs do not merely offer leverage. As one expert explained, ‘Creating value requires both scale and expertise . . . PBMs use techniques and programs that have been researched and reported in the peerreviewed literature as being effective — that is, have demonstrated value,’ including evidence based formulary design, strategies for reaching high-risk members, and retrospective analysis of drug utilization.”
Brill concluded that antiPBM policies do “nothing to address drug prices and may raise pharmaceutical spending overall.”
Instead of eliminating flexibility for Florida employers to design affordable, high-quality prescription drug coverage, policymakers at both the federal and state level should focus on addressing the root cause of high prescription drug prices, building on the foundation set in SB 1550 for holding big drug companies accountable.
SB 1550 contains provisions that will require drug manufacturers to report price increases above 15 percent in one year or exceeding 30 percent over three years. This is a positive policy that will shine a light on bad actors putting patients at risk through market-distorting price hikes.
What lawmakers shouldn’t advance are policies that restrict employers’ ability to offer coverage — especially when the federal government is teetering on the edge of advancing similar policies that would negatively affect the business community nationwide.
In the coming year, Florida’s elected leaders must prioritize strengthening our business community and protecting growth at a tenuous time for the economy. This includes rejecting any new proposals aimed at employers’ pharmacy benefits.