Rebates are not just a financial tool, they are a lifeline for small business owners like me who need to determine the best prescription benefit plan to suit the needs of our employees. Our representatives in Congress, recognizing this, rightly denied recent attempts to place restrictions on pharmacy benefit companies and the rebates they provide in the latest spending package. This ensures that employers like me have the flexibility and ability to offer the highest quality, most affordable prescription drug coverage to our hardworking employees, ultimately allowing us to continue contributing to the economic growth of our nation.
It is easy to overlook the impact of competitive benefits on a local economy, but the important work of pharmacy benefit companies makes it possible for my business to stay competitive and, most importantly, provide a secure future for our employees. The pricing options that these companies provide— like spread pricing and the flexible use of rebates—provide me with critical options when designing benefits for my employees. Rebates especially can finance additional benefits, drive down monthly premiums, and ensure prescription affordability for all my employees, showing them that their health and well-being are our top priority.
A recent survey of employers found that 91 percent said it was essential to maintain flexibility with how they use their rebate dollars. Nine in ten of those respondents also said that they use those rebates to benefit their employees. The bottom line is that the choice belongs to the health plan sponsor, and that’s how it should be.
There is another side to this story, however. Rebates, pricing options, and flexible pharmacy benefits have been a boon for small businesses, but recent attempts to undermine those tools would spark a massive payday for Big Pharma.
A study from Matrix Global Advisors (MGA) found that billions of dollars that will go directly into Big Pharma’s pockets due to the elimination market-based incentives for pharmacy benefit companies to secure higher rebates, known as “delinking.” Margins this big are nothing new for the pharmaceutical industry, but the MGA economic analysis identified a $22 billion windfall for Big Pharma in the commercial prescription drug market. Ike Brannon, a senior fellow with the Jack Kemp Foundation, recently published an op-ed summarizing the recent situation in Congress, saying,
“Most of the regulatory actions currently being proposed would ultimately limit the ability of PBMs to reduce drug benefit costs and improve patient health… The demonization of PBMs is merely a harmful political sleight-of-hand to direct anger for high drug prices away from pharmaceutical companies and onto an entity that negotiates against drug companies and others in the supply chain to reduce costs.”
Ultimately, the question on everyone’s mind is simple: How do we push drug costs down? As a business owner, one thing is abundantly clear: singling pharmacy benefit companies out will only raise costs at the pharmacy counter for employees, making it harder for businesses to provide affordable benefits, and, at the end of the day, hurt hard-working Arizonans. I am thankful that Congress stood up to the misguided attempts to target pharmacy benefit companies and allowed me to continue to provide the best benefits for my employees. Now, we need
lawmakers—especially those representing Arizona—to stand up against future attempts at undermining free market forces that drive down drug prices.
Kris Carman is the owner of Arizona Rental Repair and Restore and a Gilbert resident.
