Georgia Legislators Should Preserve Tools to Lower Drug Prices
Published in The Newnan Times-Herald
As COVID-19 continues to impact the nation, Georgia’s Governor and state legislature are faced with difficult decisions regarding not only how to reopen the state and ensure the health and well-being of the state’s citizens, but also how to deal with new and unprecedented budget challenges. At the same time, many of the state’s employers are struggling to recover from the pandemic and find savings to keep their employees on payroll.
Nearly half of Georgia’s population currently accesses health care coverage through their employers. Sharp increases in the cost of care and prescription drugs over the past decade has only magnified the burden of the COVID-19 pandemic for these businesses and the employees they cover.
Luckily, employers don’t have to address this situation alone. To help provide prescription drug benefits to employees, many Georgia employers rely on pharmacy benefit managers (PBMs) to combine the purchasing power of patients and help negotiate lower prices with drug companies. Whether employers are providing health coverage to a few dozen employees or a few thousand, the PBMs they work with can leverage the purchasing power of millions of covered individuals across the country to negotiate discounted prices that would otherwise be unavailable employers could never get on their own.
In fact, drug costs would nearly double for employees and their families without the savings PBMs deliver through tools such as negotiation, pharmacy networks and ensuring that members take their drugs safely and effectively. A recent analysis shows that Georgia employers will save $17.1 billion over the next 10 years by continuing to use these cost-saving tools. And the state is poised to save $29.9 billion in total by using PBMs, when accounting for the public- and private-sector markets combined.
Most Americans never see the working partnership between PBMs and employers to provide sustainable health coverage. But the savings are very real and critical to employers’ continuing ability to help cover the cost of prescription drugs for their employees. That’s why it’s so concerning that some politicians, including those in Georgia, want to limit the PBM tools and partnership with employers to negotiate lower drug costs. For employers and the Georgians these health plans serve, that just doesn’t make any sense—and it won’t lower drug prices one bit.
As Georgia faces budgetary challenges caused by COVID-19, including up to 567,000 new Medicaid enrollees, legislators may be tempted to find quick fixes to save the state money. However, lawmakers should look to other states for examples of what could happen.
Last year, Oklahoma passed unnecessary restrictions on PBMs despite fierce pushback from major employers across the state. The measure will cost the state at least $7.2 million[1], leading to increased health care costs for the state, Oklahoma employers and, by extension, consumers and taxpayers. And in California, the Medicaid program will move from a managed care model to fee-for-service in 2021. This change is expected to increase the state’s prescription drug costs by an estimated $757 million within five years.
Employers in Georgia – and Americans all across the country – are looking for common-sense solutions that will help bring drug prices down, not push them higher. Lawmakers should preserve and strengthen the tools that are helping to keep hard-working Georgians healthy and on the job. The stakes are high, but the answer couldn’t be clearer.
[1] “HB 2632 – Creating the Oklahoma Pharmacy Reform Act” Impact Statement. Oklahoma Office of Management & Enterprise Services, Employees Group Insurance Division (EGID). 2019.