The prescription drug cost hike that nearly happened
Originally Appeared in the Center Square
Costs for medical care are already too high, but in the past legislative session legislators considered a bill that would have added extra costs to medical care even though hardworking families across Louisiana are recovering from the COVID-19 pandemic. Fortunately, lawmakers stood up for patients and the legislation did not advance to the Governor’s desk. But that doesn’t mean the fight is over. All Louisianans should be on high alert as the bill’s advocates are likely to try again in 2022.
What’s at stake here is the ability of employers and other health care providers to negotiate prescription drug prices through something called a “Pharmacy Benefits Manager” (PBM). The ability of a third party to negotiate the price of prescription drugs has led to consistent cost savings for patients.
The legislation would have inserted government bureaucracy into private employer contracts, taking away tools job creators use to provide high-quality, low-cost health coverage to their workforce. Louisiana already has some of the most onerous and punishing licensing boards in the country, and this measure would have added one more requirement to an already red tape-laden health care sector by making PBMs submit to the state’s Board of Pharmacy. PBMs are already regulated by the Department of Insurance in Louisiana, as they are benefits managers, not pharmacists.
Louisiana has a long history of putting up artificial roadblocks for new innovative businesses. Overregulating and creating mounds of red tape for new businesses not only hurts the state but also hurts consumers. The health care industry has seen skyrocketing costs that have forced patients to pay the high prices, but PBMs have offered a way for a reduction in prescription drug and medical care prices. Innovative businesses that help consumers like PBMs should be welcomed with open arms, not met with government roadblocks
Further, legislation like this puts taxpayers, patients, and businesses on the hook to pay $2.5 billion in higher health care costs over the next 10 years, according to an analysis by Visante. It would have increased premiums, deductibles, and copays, making it harder for patients to afford prescription drugs they need and more expensive for businesses to provide affordable coverage to their employees.
To top it off, the proposed policy would have eliminated important patient protections that are used to prevent costly pharmacy fraud, which costs taxpayers millions of dollars every year and increases health care costs. For example, in just the few months this bill was being considered in the Legislature, three independent pharmacy employees in Louisiana pleaded guilty to stealing $15 million in taxpayer money from Tricare, a program that provides health care to our brave men and women in the military. When this type of fraud occurs, all consumers pay the price through higher health care premiums and prescription drug costs. Making it more difficult to detect these crimes is just plain bad policy.
There’s no question health care policy is critical to the future of Louisiana. With costs continuing to rise and the economy struggling, now is the time for innovation in public policy that can deliver a better product, faster and at a lower cost. That’s why we should applaud steps that have been made to expand telehealth, roll back regulations paused during the pandemic, and increase access to quality health care for everyone.
Lawmakers, regulators, taxpayers, employers, and workers should come together to steadfastly continue to reject these failed, bureaucratic policies of the past and embrace innovation and consumer-focused policies that spur competition, lower prices, and greater access to health care.