New Arkansas Mandate Would Increase Drug Costs for Employers, Consumers (Mark Merritt Commentary)

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(Editor’s note: Arkansas Business received this commentary in response to its Monday cover story on how state lawmakers propose to regulate pharmacy benefit managers.)

This week, the Arkansas Legislature is considering a new mandate forcing employers and government health plans to pay more for prescription drugs. 

The powerful drugstore lobby is pressuring the state’s elected officials to require higher payments. Just a few weeks ago, Gov. Asa Hutchinson called for the state’s pharmacists, health insurance carriers and pharmacy benefit managers to resolve the debate over reimbursement rates with a “market-based solution.” When they couldn’t reach agreement, the question became whether to impose a new government mandate requiring employers to pay drugstores more.  

The proposal would undermine the cost savings tools plans use to reduce premiums and prescription drug costs for patients and businesses alike. Currently, those private-sector tools reduce costs by $941 per patient each year. 

More: See the full study on those costs here.

Even more troubling, this would put patients’ health at risk — especially those who need complex medications for serious conditions like cancer or multiple sclerosis. Many of these must be injected or infused, and pose the risk of serious side effects if improperly administered. This bill specifically prohibits plans from requiring safety and accreditation standards for drugstores that administer these complex and potentially dangerous medications.

However, a survey of physicians found that they don’t believe most drugstores have the “expertise and capability” to safely administer these complex specialty medications. Only 5 percent of these doctors believe “all” drugstores are qualified to do so, according to the survey.

Make no mistake, this bill is designed to enrich the drugstore lobby at the expense of patients and the employers and unions that provide prescription drug coverage. It’s a big government solution that risks undermining safety and affordability.

Mark Merritt is president and CEO of the Pharmaceutical Care Management Association, which represents pharmacy benefit managers. PBMs administer prescription drug plans for more than 266 million Americans through commercial health plans, self-insured employer plans, union plans, Medicare Part D plans, the Federal Employees Health Benefits Program, state government employee plans, managed Medicaid plans and others.