Statewide view / Keeping big pharma away from PBMs: Small businesses and seniors depend on them – Duluth News Tribune

Pharmacy benefit managers, or PBMs, play a crucial role in helping employers like me negotiate with drug manufacturers, obtain discounts, and pass on savings to keep costs manageable for businesses and employees. Yet Big Pharma, with the support of radical voices on the left, is working hard to dismantle the PBM system that helps us manage these costs – and provide a free market solution to the prescription drug market. The goal is to push Congress to eliminate performance-based payments and rebates negotiated by PBMs, an idea that would reward big pharmaceutical companies and could cause drug prices to skyrocket.

One of the myths peddled by big pharma is that PBM rebates somehow contribute to the high cost of drugs. This is simply not true.

The rebates that PBMs get from drug manufacturers are a critical tool that allows them to negotiate rebates and pass the savings on to health plan sponsors, such as the many Minnesota employers that offer health benefits. This rebate system helps PBMs keep premiums, cost sharing, and other healthcare expenses lower for employers and employees.

According to economist Dennis Carlton, professor emeritus at the University of Chicago Booth School of Business,

almost all discounts

Negotiated PBMs are passed to health plan sponsors, putting the power to decide how to use the savings in the hands of those who actually provide health benefits, not the government.

Today, Congress is considering a proposal called “debundling,” which would separate PBMs’ compensation from their performance. This would reduce PBMs’ ability to negotiate rebates, essentially inviting big pharmaceutical companies to raise drug prices unchecked.

Economist Casey Mulligan of the University of Chicago believes the policy could give big pharmaceutical companies a significant advantage.

A windfall of 11 billion dollars

while forcing seniors to shoulder $13 billion in higher premiums. For small business owners like me – and for seniors on fixed incomes – it’s an unmanageable burden.

Our healthcare system needs market-based solutions that keep costs low, not government interference that allows big pharmaceutical companies to increase their profits at our expense. Discounts provided by PBMs leverage the scale and bargaining power that small businesses could never access on their own. This helps us maintain manageable costs and competitive benefits.

Here in Minnesota, where small businesses are the backbone of the economy, this type of flexibility is essential to growth and our competitive advantage.

As we look ahead to a new administration of President Donald Trump focused on rebuilding our economy, it is critical that Congress avoid rushing to enact harmful policies that would dismantle market-driven tools. If Congress passes anti-PBM legislation as part of a year-end spending package, lawmakers will saddle the new administration — and small businesses like mine — with a costly mess to clean up.

PBMs are critical allies for employers and seniors, allowing us to control costs, keep drug prices low, and provide valuable benefits without unnecessary government intervention.

Weakening PBMs would leave small businesses and families at the mercy of prices charged by big pharmaceutical companies. Big Pharma’s current push to eliminate PBM-negotiated rebates is nothing more than a drain on profits at the expense of seniors, businesses, and working families. Our leaders in Congress should oppose this anticompetitive agenda and protect the critical role PBMs play in our healthcare system.

Marcy Kisby Baumann is the owner of VENDELLA Euro Boutique & Coffee Haus, a coffee shop and boutique in Eagan, Minnesota. She wrote this for the News Tribune.