For almost any Missouri small business that provides healthcare benefits to its employees, the worst time of year is when you find out how much premiums are going up over the next 12 months.
To be frank, small businesses have very few tools to help drive healthcare costs down. And the Missouri Legislature could be on the verge of taking one of those tools away, which will be disastrous for small businesses and manufacturers across the Show Me State.
The full court press on well-meaning lawmakers to support HB-1677 and SB-921 is deeply disappointing. These bills would directly lead to higher prescription drug costs, a major driver of healthcare premium increases. One of the tools our businesses now have to control prescription drug pricing is the ability for insurers and pharmacy benefit managers to negotiate lower prices with in-network pharmacies in exchange for more volume.
Because the free-market negotiation puts downward pressure on prescription drug costs, it has now become a bullseye in Jefferson City. The legislation would institute a provision called “any willing pharmacist” that eliminates the ability of insurers to negotiate lower pricing on prescription drugs.
Under this provision, small businesses would have to pay the same higher price to any pharmacist that fills a prescription, whether they are in-network or not. HB-1677 and SB-921 would kill one of the last remaining free-market arrangements between insurers and in-network pharmacies that allows small businesses to get lower prescription drug costs.
An analysis shows that if Missourians aren’t allowed to access these discounts, the legislation would raise the cost of prescription drugs by $1.8 billion over the next decade. That’s the cost of erasing one of the last remaining free-market provisions for Missouri’s employers.
To put this into perspective, this is like passing a law that says regardless of whether a company sells 10 widgets a year or 10 million widgets annually, its customers must pay whichever costs more, because volume discounts are now illegal in Missouri. No legislator, Republican or Democrat, would vote for such a bill, yet here we are debating doing just that for prescription drug pricing.
The legislation would even hit the pocketbooks of Missouri taxpayers, because publicly funded state employee and retiree health plans currently utilize these pharmacy networks to keep costs down.
The last thing businesses or families need is a manufactured increase in their health care premiums. That’s likely why you saw so many different Missourians speak out in opposition to this legislation at a recent Senate Insurance and Banking Committee hearing.
In fact, this may be one of the only times in modern Missouri history where business and labor both adamantly opposed the same legislation in the same committee hearing. Both business and labor know that “any willing pharmacist” drives their costs up at a time we can least afford to do so.
As Missouri manufacturers and businesses know, healthcare costs are likely to go up on an annual basis. But we implore Missouri legislators to not take away one of the very few tools we have to keep prescription drug prices down. “Any willing pharmacist” would lead to higher costs for business, employers, and taxpayers, and empty out our toolshed.
President of Associated Industries of Missouri