The rising cost of health care ranks among the most pressing issues nationwide, and North Carolina is no exception. A recent Forbes study labeled our state as the worst in the entire country for health care costs and the third worst for health care overall. If there were ever a time for state leaders to address this crisis, it is now.
Unfortunately, some legislators are wrongfully placing blame on a critical player in the fight for affordable healthcare: pharmacy benefit managers (PBMs). Misunderstanding the role and impact of PBMs undermines efforts to tackle the real drivers of high health care costs.
PBMs have a crucial function in our health care system. By leveraging their bargaining power, they negotiate rebates and discounts on prescription drugs, significantly reducing costs for patients. The return on investment is remarkable: every dollar spent on their services leads to roughly $10 in savings.
North Carolina residents save hundreds of dollars per year on out-of-pocket medication costs thanks to PBMs. For those with chronic conditions, these savings can be even more substantial, sometimes amounting to thousands of dollars annually.
While securing lower prices on medications might be the most well-known benefit of PBMs, they also contribute to better health care outcomes through the ability to tailor programs to fit a patient’s medical needs. Through medication adherence, for instance, they ensure patients follow their doctor’s orders, reducing hospital readmissions and avoiding costly complications. With PBMs, it truly does go beyond just lower costs. It’s a holistic approach that allows them to have such a big impact.
Meanwhile, more than 1 million small businesses in North Carolina rely on PBMs to manage health plans efficiently, helping them remain competitive and support their workforce’s well-being. These employers need PBMs to provide quality health plans without breaking the bank — something small businesses know all too well. No wonder more than 9-in-10 employers report satisfaction with their PBM.
Despite these noteworthy benefits, critics are still eyeing PBMs as a primary target in health care reform proposals. While there is always room for improvement, lawmakers must recognize that without the negotiating power of PBMs, drug prices would be considerably higher, placing an unbearable financial burden on consumers and patients. The common-sense solution, therefore, is not to disrupt PBMs but rather build on their progress toward affordable health care.
Ultimately, North Carolina’s sky-high health care costs stem from a variety of factors, including the soaring cost of medical procedures and inefficiencies in the health care delivery system. Focusing solely on PBMs diverts attention from these broader issues and endangers one of the few mechanisms working to control costs.
Sadly, some anti-PBM proposals in the legislature would make matters worse by imposing more fees and eroding the competition essential to a vibrant health care market. One draft bill would mandate a $10.24 fee on the vast majority of prescriptions. Why would we raise costs on patients at a time when it’s already prohibitively expensive to visit the pharmacy counter?
North Carolinians have every right to be dissatisfied with our state’s poor health care system. As legislators in Raleigh debate policy solutions, they should understand the unintended consequences of targeting PBMs, ultimately harming the very people they aim to protect. By strengthening the role of PBMs while pursuing broader health care reforms, we can make strides toward making our state a leader in health care affordability.
Glenn Lancaster is a resident of Moore County.