Last year, I wrote a brief defense of pharmacy benefit companies and their critical role in keeping prescriptions affordable. Most importantly, I discussed the threat against the free market system, which I am proud to say our lawmakers also recognized.
Today, many of the anti-competitive policies that have been proposed met their end on the floors of Congress in a significant victory for the free market and the Magnolia State during the most recent spending package. I could not be more thankful to our representatives for standing strong against these tactics. These policies would have cost us billions and left many families without any hope of affording their prescriptions in the face of record-high inflation.
And you read that right—billions. A study from Alex Brill with Matrix Global Advisors (MGA) estimated that health care premiums for employer-sponsored coverage—responsible for 42 percent of people in Mississippi—would increase across the board by $26.6 billion per year. In aggregate, between the commercial and Medicare Part D insurance markets, Brill estimates the total drug profits collected as a direct result of "delinking" pharmacy benefit companies from rebates would amount to a staggering $32 billion.
As Mayor, I can never afford to ignore research signaling catastrophic price hikes for our community. I’ve spoken with dozens of people about their struggle to afford prescription medications, and I remain confident that free market solutions are the path forward for addressing those challenges. For employers, the limited pricing options that liberals held up as the future of prescription coverage would fly in the face of what small businesses want.
Take, for example, the misguided attempts at “delinking” market-based incentives for pharmacy benefit companies to secure higher rebates for employers. Nine in ten employers currently use rebates provided among the many pricing options employers have to enhance their employees’ coverage and drive down the cost of premiums. This is free market cooperation at its best, and we know from research by renowned health care economists that going the opposite way would be a disaster for Mississippi patients and businesses.
The bottom line is that the way in which prescription drug benefits are designed should be up to health plan sponsors – such as business owners – not Washington bureaucrats. We do not need lawmakers making these critical decisions for us.
I am confident that our representatives will continue to make the right choices for Mississippi. Going into 2024 and beyond, we need common-sense, free-market policies that will be beneficial to communities across our state.
Ken Strachan is the mayor of North Carrolton, and is a member of the Mississippi Municipal League board of directors.
