For almost every small business in Missouri that offers health care benefits to their employees, the worst time of year is when you find out how much premiums will increase over the next 12 months.
To be frank, small businesses have very few tools to reduce health care costs. And the Missouri Legislature may be on the verge of removing one of those tools, which will be disastrous for small businesses and manufacturers in the Show Me State.
The full court press on well-meaning lawmakers supporting HB-1677 and SB-921 is deeply disappointing. These bills would directly drive up prescription drug costs, a major factor in rising health care premiums. One of the tools our companies now have to control prescription drug prices is the ability for insurers and pharmacy benefit managers to negotiate lower prices with network pharmacies in exchange for greater volume.
Because open-market trading puts downward pressure on prescription drug costs, it has now become a target in Jefferson City. The legislation would institute an “any consenting pharmacist” provision that would eliminate the ability of insurers to negotiate lower prices on prescription drugs.
Under this provision, small businesses would have to pay the same higher price to any pharmacist who fills a prescription, whether or not they are a member of the network. HB-1677 and SB-921 would kill one of the last free market agreements between insurers and network pharmacies that allows small businesses to get lower prescription drug costs.
Analysis shows that if Missourians are not allowed to access these discounts, the legislation would increase the cost of prescription drugs by $1.8 billion over the next decade. This is the cost of erasing one of the last remaining free market provisions for employers in Missouri.
To put that in perspective, it’s like passing a law that says if a company sells 10 widgets a year or 10 million widgets a year, their customers have to pay whichever is higher because volume discounts are now illegal in Missouri. No lawmaker, Republican or Democrat, would vote for such a bill, but here we are debating doing just that for prescription drug pricing.
The legislation would even hit the wallets of Missouri taxpayers, as state-funded employee and retiree health plans currently use these pharmacy networks to cut costs.
The last thing businesses or families need is an artificial increase in their health care premiums. That’s probably why you saw so many different Missourians oppose this legislation at a recent Senate Insurance and Banking Committee hearing.
In fact, it may be one of the only times in modern Missouri history that business and labor have adamantly opposed the same legislation in the same committee hearing. Companies and workers know that “any consenting pharmacist” is driving up their costs at a time when we can least afford it.
As manufacturers and businesses in Missouri know, health care costs are likely to rise each year. But we implore Missouri lawmakers not to take away one of the few tools we have to keep prescription drug prices low. “Any pharmacist consenting” would result in higher costs for businesses, employers and taxpayers, and empty our toolbox.
President of Associated Industries of Missouri