The Louisiana Legislature just wrapped up its regular session, and while lawmakers accomplished much good work, a troubling pattern emerged that should concern anyone who believes in economic opportunity and free markets. Louisiana faces a choice: Will we transform into a state where families and entrepreneurs can flourish, or will we remain the big-government populist state envisioned by Huey Long?

The most prominent example of proposed government overreach emerged in the final hours of the session, when a conference report for House Bill 358 included a provision that would have prohibited companies from owning both pharmacy benefit managers (PBMs) and retail pharmacies.

Governor Jeff Landry has indicated he may call a special session to revisit this issue, believing it will lower prescription drug costs. While the Governor’s intentions are laudable, the approach represents a concerning willingness to use government power to intervene in private markets rather than address underlying problems through competition and transparency.

This PBM legislation isn’t happening in isolation—it’s part of a broader trend where well-meaning policymakers seem to be increasingly comfortable picking winners and losers in the marketplace.

Let’s take a look at what’s at stake.

What are PBMs?

PBMs are companies that act as intermediaries in the prescription drug supply chain, managing prescription drug benefits on behalf of health insurance plans, employers, and government programs like Medicaid. PBMs negotiate with pharmaceutical manufacturers to secure discounts and rebates in exchange for favorable placement on formularies (lists of covered drugs), process prescription claims, manage pharmacy networks, and determine how much pharmacies get reimbursed for filling prescriptions.

The three largest PBMs—CVS Caremark (owned by CVS Health), Express Scripts (owned by Cigna), and OptumRx (owned by UnitedHealth Group)—control roughly 80% of the market. PBMs argue they help lower drug costs through their negotiating power and administrative efficiencies. Critics contend that their practices can drive up prices for consumers, create conflicts of interest, and squeeze independent pharmacies through unfavorable reimbursement rates.

The Arkansas Experiment

Arkansas provides an instructive case study. Earlier this year, Arkansas became the first state to ban PBM ownership of pharmacies, and the results are exactly what economic theory would predict. CVS announced it may close 23 pharmacies in the state, UnitedHealth’s Genoa Healthcare faces closing 11 specialty mental health pharmacies, and multiple federal lawsuits are challenging the law’s constitutionality.

Even more troubling, the Arkansas law included convenient exemptions that protected certain in-state competitors while targeting out-of-state companies. As CVS noted in its federal lawsuit, the law was amended to include “an exemption for PBM-affiliated pharmacies if the PBM serves only the pharmacy’s own employee benefit plan”—an exemption that covers Walmart while forcing CVS to potentially exit the state entirely.

This isn’t principled policy—it’s using government power to advantage some businesses over others. Louisiana can do better.

A Long Louisiana History of Market Intervention

The PBM issue represents just one example of a concerning trend. Louisiana has a long history of big government populism that intervenes in the marketplace. As a result, we’ve lingered at the bottom of every good list for decades. Despite a recent shift toward free markets and free enterprise, evidence suggests legislators remain comfortable with heavy-handed market interventions—policies that may sound good in press releases but have serious ramifications. Whether it’s forced business restructuring, mandatory disclosure requirements that create competitive disadvantages, or regulations that effectively prohibit certain business models, the cumulative effect is a less competitive and less innovative economy.

There’s no doubt that the intentions are good, and the solutions can sound appealing on the surface. But the unintended—or even intended—consequences chip away at the freedom and opportunity that make a state thrive. The PBM legislation promises lower drug prices. Other bills promise to protect small businesses or increase transparency. But taken together, they create an environment where success depends less on serving customers well and more on navigating regulatory complexity and political relationships.

Constitutional and Practical Concerns

Beyond the policy merits, Louisiana would face the same constitutional challenges that Arkansas is now confronting. Federal courts will ultimately decide whether states can force interstate businesses to restructure simply because local competitors prefer a different market structure. Louisiana taxpayers shouldn’t have to fund expensive litigation to defend economically questionable policies.

On a more practical level, Senate President Cameron Henry made an excellent point when he noted that the proposed bill wouldn’t even take effect until 2027. If there are genuine problems with PBM practices, they can be addressed through the transparency and oversight measures that the Legislature already enacted in House Bill 264, rather than the nuclear option of forced divestiture.

The Opportunity Cost

Perhaps most importantly, Louisiana has tremendous momentum right now. Businesses are looking at our state with new interest thanks to recent tax reforms and regulatory streamlining. We’re competing successfully for investment and jobs against other states that have traditionally held economic advantages over us.

Every time we add unnecessary regulatory complexity or indicate that government will restructure markets based on political pressure, we erode that hard-won competitive edge. Companies evaluating where to locate or expand are watching how Louisiana treats existing businesses, and heavy-handed interventions send exactly the wrong signal.

This doesn’t mean Louisiana should ignore genuine market problems. The Legislature passed transparency requirements for PBMs through House Bill 264, and results of that should be watchdogged in the coming months and years. If there are anticompetitive practices, they should be addressed through targeted enforcement, not wholesale restructuring of successful business models.

The principle should be simple: Government’s role is to ensure fair competition, not to predetermine competitive outcomes. When markets produce results that some constituencies don’t like, the answer isn’t to restructure the market—it’s to ensure the market is truly competitive and transparent.

The Stakes for Louisiana

Louisiana stands at a crossroads. We can continue building upon our recent economic momentum by maintaining a business-friendly environment where success depends on serving customers well—or we can join the growing list of states where political considerations and connections increasingly shape economic policy. The choice we make will determine whether Louisiana becomes a destination for entrepreneurs looking to build the next great company.

If we want Louisiana to be a place where everyone has the opportunity to flourish—whether as an employee, entrepreneur, or consumer—we must resist the temptation to use government power to engineer market outcomes. The free market isn’t perfect, but it’s far better than a system where politicians and bureaucrats decide which business models are allowed to succeed.

The PBM debate is really about something much bigger: What kind of economic environment do we want to create in Louisiana? Let’s choose opportunity over intervention, competition over control, and economic freedom over political management of markets.

Our state’s future prosperity depends on getting these choices right.