The current debate in Congress on how to lower costs of prescription drugs is becoming increasingly out of touch with the realities on the ground for small businesses and their employees. Rather than focusing on barriers to competition in the drug market, Congressional leaders have narrowed their sights on pharmacy benefit companies, which already help patients and payers save $1,040 per person per year, and help employer and labor union plans and their patients save over $800 per enrollee per year on prescription drugs.

This misplaced focus threatens to upend a proven model for saving employers and patients money and for providing the flexibility they desire to choose the coverage plans that best fit their unique needs.

Misguided policies singling out pharmacy benefit companies, which are proven actors to secure savings for employers, patients, taxpayers, and families, will do nothing to lower drug costs and will actually risk increasing costs.

Our Senators here in Utah have recognized this basic fact, supported by years of research and data that show how increasing – not limiting – competition in the pharmaceutical market helps to both lower costs and enhance health outcomes for patients.

During a recent hearing of the Senate Committee on Health, Education, Labor and Pensions (HELP), Senator Mitt Romney offered an amendment to preserve spread price contracting despite the committee’s attempt to ban it altogether through S. 1339, the Pharmacy Benefit Manager Reform Act, which could put small pharmaceutical benefit companies out of business and reduce competition. As Senator Romney pointed out, “A vast majority of small and middle-sized employers prefer spread price contracting because it’s lower cost and more certainty for them. That's why they choose it. Making that illegal is not going to help small or mid-sized businesses.”

Meanwhile, in the Senate Judiciary Committee, Senator Mike Lee introduced the Biosimilar Red Tape Elimination Act, which would help clear regulatory barriers to allow for more biosimilars to enter the market. In introducing the bill, Senator Lee rightly recognized that “Our regulatory environment is making it too difficult and expensive for biosimilars to make it to the market. Ultimately, it’s the patients who suffer from a lack of competition and high drug prices.”

As our Senators know, competition is the proven and most effective way to drive down costs in the prescription drug supply chain. Unfortunately, some members of Congress are promoting new legislation that means more government mandates, and that will actually make the market less competitive by restricting pharmacy benefit companies, which promote greater competition by encouraging the use of more affordable medications such as generics and biosimilars. 

It’s simple economics: when there are more options in the market, costs will go down.

Instead, proposals now moving through Congress would increase heavy-handed government mandates and red tape in the health care market, stifle competition, and expand unnecessary regulatory overreach, leading to higher costs and fewer choices for employers.

Our ability to have choice and flexibility with our health care is critical for patients and small businesses, and it must be preserved. Utahns and all Americans are counting on Senators Lee and Romney to do the right thing – oppose new government mandates and unleash competition in the prescription drug market to help lower costs for everyone.