Too many North Carolinians suffer from the high cost of prescription drugs. Fifty-four percent of Tar Heels say they struggle to afford the medication they need. Over 30% say they skip taking their prescription drugs to save money. North Carolina’s drug costs problems are only expected to get worse. Pharmacies throughout the state are experiencing substantial supply shortages of cheaper generic medications this year. Fewer generic drugs in stock means higher prices for consumers.
Given this reality, why are some members of Congress taking regulatory action that will make it even more difficult for North Carolina consumers to obtain cheaper drug alternatives?
Members of Congress are trying to convince Sens. Ted Budd and Thom Tillis to support the PBM Transparency Act, a bill that will sick government regulators on entities called pharmacy benefit managers (PBMs) at the behest of the nation’s largest drug companies.
The big drug companies don’t like PBMs because healthcare plans hire these groups to strategize cost-saving measures for their customers. One of the most effective ways they do so is by ensuring that more generic drugs get approved for use in their health plans and negotiating the cost of brand-name drugs down.
The Office of Management and Budget testified before Congress that, thanks to PBMs, “we have seen a very dramatic shift towards generics and away from branded drugs.” By redirecting their plans to using generics and other cheaper drug alternatives, the agency credited PBMs for saving billions of dollars for the Medicare Part D program. Sens. Budd and Tillis should enthusiastically support these healthcare actors for helping their constituents in such a difficult time. They should not weaponize the use of government force against them.
Don’t just take the OMB’s word for it. Several public and private sector studies have also concluded that PBMs significantly reduce prices for the healthcare purchasers they serve.
Both the Congressional Budget Office and the US Government Accountability Office have reported that PBMs act as an important intermediary in containing prices and substantially lower prescription drug costs. A 2022 study, conducted by University of Chicago economics professor Casey Mulligan, similarly determined that PBMs save health insurance recipients nearly $150 billion a year.
There’s a huge cost to not using PBMs. Just asked the Department of Labor. A 2023 study by the DOL’s inspector general found that the department’s decision to eschew these healthcare negotiating agents cost the agency hundreds of millions of dollars. In this time of great vulnerability, where cheap drugs are already harder to come by than perhaps ever before, North Carolina cannot afford to find itself in the same boat.
North Carolinians expect their representatives in DC to stand up for their interests. They don’t want our lawmakers to further the let drug companies and make the process of getting the drugs they need worse than it is already. A vote for the PBM Transparency Act is a vote against lower drug costs, consumer choice, and healthcare affordability. Sens. Budd and Tillis should not give the measure the time of the day.
