President Trump, his Administration, and Congress have been busy taking meaningful steps toward making prescription drugs more affordable and accessible. Just this week, new health care affordability czar Casey Mulligan announced that the Administration’s policy goal is “better health and lower costs with more control in the hands of patients and families.”
However, a redundant, competition-killing, cost-raising proposal by the Department of Labor (DOL) threatens to upend that progress and exacerbate the affordability crisis too many Americans are facing.
The good news? DOL can easily withdraw the rule – which is duplicative of a law the President just enacted – and end the threat of even higher health care costs hanging over American families.
The proposed regulation was published before landmark pharmacy benefit manager (PBM) reform was enacted in the Consolidated Appropriations Act (CAA) and now crosses wires with unprecedented transparency mandates for PBMs included in that legislation, making it not only redundant and unnecessary, but harmful.
A recent DC Journal op-ed argues that it will disproportionately affect smaller PBMs by burying them in additional paperwork and administrative complexities:
“While making more information public often benefits consumers, it also comes with costs — costs that not every company is equally capable of bearing… By increasing costs across the board, the rule would make it harder for smaller PBMs to compete, exactly the opposite of what federal policymakers have been working toward.”
Several mid-market PBMs recently made similar arguments in formal comments and warned the DOL that the proposal would add significant costs to their companies, leading to a chilling effect for new market entrants in the PBM industry.
University of Wisconsin-Madison Professor Tony Lo Sasso summarized the impact to Modern Healthcare, saying, “It’s the little guys who aren’t as vertically integrated who are trying to compete in this space that are not going to be able to.”
A Washington Examiner op-ed flagged that thanks to wide-ranging PBM reforms that are now law, the proposed rule is duplicative and unnecessary:
“The proposed rules come on the heels of February’s Consolidated Appropriations Act, which erected a comprehensive federal framework to enhance transparency, lower costs, and increase oversight of the pharmacy benefits manager market. The bipartisan omnibus spending package made real progress toward transparency and savings in America’s opaque healthcare system and was a lobbying defeat for the PBM industry.”
As written, the DOL rule risks undermining competition, innovation, and choice in the PBM market. It’s time to let PBM reform in the CAA take effect and let Congress and the Administration lead on this important issue. DOL should listen to the growing number of voices and rescind the proposed rule.