My View: Government takeover of health care is wrong prescription for Arizona - Phoenix Business Journal
Former gubernatorial candidate Karrin Taylor Robson argues against any plan by the Arizona government to try to influence free market factors surrounding prescription drug costs and other facets of health care. Karrin Taylor, a Republican, argues that Gov. Katie Hobbs' proposal to introduce a government takeover of the health care market is the wrong prescription for Arizona. She criticizes the proposal, stating that it undermines the principles that make our health care system thrive. The proposal includes a proposal aimed at Pharmacy Benefit Managers (PBMs) and establishing a Prescription Drug Affordability Division to cap prices on several drugs. Critics argue that such a move would increase costs for patients across the board as PBMs play a crucial role in negotiating drug prices with big drug companies and ensuring affordable medications. Instead of scapegoating PBMs, focus should be on holding drug companies accountable for setting exorbitant list prices. All lawmakers should champion policies that encourage competition, foster innovation and empower consumers, while avoiding knee-jerk reactions that undermine the principles of the free-market health care industry.
Published : a month ago by Karrin Taylor Robson in Business Politics Health
As our lawmakers in Phoenix grind through another legislative session and health care continues to be one of Americans’ most pressing concerns, it is no wonder that our elected officials are looking for ways to lower health care costs. Unfortunately, Gov. Katie Hobbs seems intent on inserting the government into the health care market and picking winners and losers to do so.
As a Republican, I firmly believe in the power of free-market principles to drive innovation, efficiency, and, ultimately, better outcomes for the American people. While it is important to address concerns about affordability and access to medications, we must be cautious about the unintended consequences of proposals that threaten to undermine the very principles that make our health care system thrive. The last thing our state needs is the government making critical decisions when it comes to how employers can offer coverage and how patients utilize these critical benefits.
During her State of the State address at the start of the legislative session, Gov. Hobbs announced a proposal aimed at Pharmacy Benefit Managers (PBMs) and establishing a Prescription Drug Affordability Division to cap prices on several drugs. In short, Gov. Hobbs rolled out a government takeover of the health care marketplace which will undoubtedly increase health care costs for Arizonans.
Proposals such as this represent a dangerous encroachment of government into the private sector, effectively paving the way for a government takeover of the health care market and guaranteed increased health care costs for families and hardworking Arizonans. The pharmaceutical industry, like any other sector, is most cost effective when market forces are allowed to operate freely. Government interference, in this case, would risk stifling competition and innovation, two critical drivers of progress in the health care industry.
Another crucial point to consider is the potential for government to pick winners and losers by intervening in the operations of PBMs and the pharmaceutical market. By imposing regulations or restrictions, policymakers would inadvertently be favoring certain players in the market, disrupting the delicate balance of competition. This would create a system where government interference, rather than market forces, determines which businesses thrive and which ones falter.
If Gov. Hobbs had her way, the government would be able to dictate how a business is able to design the benefits they offer their employees and their families, taking away the flexibility and choices they need to decide what really works best.
Focus should be on holding drug companies accountable
Moreover, the argument that targeting PBMs would lower health care costs is flawed. In reality, such a move would drive up costs for patients across the board. PBMs play a crucial role in negotiating drug prices with big drug companies and ensuring that patients and families have access to affordable medications. Disrupting this process could lead to increased costs and reduced access, as the market dynamics that currently keep costs in check would be compromised.
Joel Zinberg, a senior fellow at the Competitive Enterprise Institute, explained in a recent policy paper that, “PBMs are a free market solution that enhances competition through group purchasing and negotiated discounts that provide substantial economic and health benefits for consumers and taxpayers,” and how proposals targeting PBMs “could decrease competition and result in higher, not lower, costs. They will sacrifice much of the value that PBMs provide and limit the ability of smaller PBMs to evolve and compete in the market.”
Instead of scapegoating PBMs, a more effective approach is to address the root of the problem – the pricing strategies and anti-competitive practices of big drug companies. The focus should be on holding these big drug companies accountable for setting exorbitant list prices for their products. By targeting the source of the issue, we can encourage transparency, competition and fair pricing practices in the industry.
All lawmakers should champion policies that encourage competition, foster innovation and empower consumers while avoiding knee-jerk reactions that risk undermining the very principles that have made our health care system a global leader. In the pursuit of a healthier Arizona, our legislators should reject Hobbs’ misguided health care agenda and instead prioritize solutions that strengthen, rather than erode, the foundations of our free-market health care system.
Karrin Taylor Robson is founder and president of Arizona Strategies, a land use consulting firm.