keah

New Kansas pharmacy law well-intentioned, but pill tax in practice | Opinion

Mon, 21 Sep 2026 15:55:02 GMT

New Kansas pharmacy law well-intentioned, but pill tax in practice | Opinion

New Kansas law could raise costs for medications at pharmacies. AFP via Getty Images Kansas employers, employees and families should prepare for the impact of Kansas Senate Bill 20’s new prescription drug mandates.

Most Kansans will never see a line item labeled “pill tax” on a bill or receipt. Yet as of July 1, a new state mandate took effect that increases reimbursement requirements within Kansas’ prescription drug marketplace.

While the impact will vary by health plan, employers and workers are likely to feel the resulting cost pressures in the months and years ahead. SB 20, passed by the Kansas Legislature earlier this year, imposes new government-mandated reimbursement requirements on prescription drugs.

Supporters argued the legislation would provide financial support to pharmacies. What received far less attention during the debate, however, is who ultimately pays for those mandates: Kansas employers, employees and families.

Economics has a way of ignoring political talking points.

When government requires higher payments within the health care system, those costs must be absorbed somewhere within the health care supply chain.

SB 20 requires pharmacy benefit managers to reimburse pharmacies through a state-mandated dispensing fee set at the National Average Drug Acquisition Cost, plus $10.50, rather than allowing market participants to negotiate rates that work best for employers and employees.

Regardless of one’s opinion about PBMs, the result is the same: when the government mandates higher payments through a price floor, health care costs rise.

Kansas employers understand this reality all too well as they struggle with health care inflation that consistently outpaces general inflation. In survey after survey, health care costs rank among the top concerns for employers trying to grow their businesses.

Every additional dollar spent on health care is a dollar that cannot be invested elsewhere. It is a dollar that cannot be used for higher wages, employee bonuses, retirement contributions, new equipment or hiring additional workers.

While supporters of the legislation framed the debate as a battle between pharmacies and PBMs, that was never the central question for employers.

The real question was whether government should intervene in private health care arrangements in ways that increase costs for those purchasing coverage. Unfortunately, the Legislature answered that question with a “yes.”

When state policy increases required payments within the health care system, those costs are ultimately borne somewhere within that system.

However, Kansans should be aware that the exact impact of SB 20 will vary among health plans and consumers. Some patients may not see immediate changes at their pharmacy. Other patients will be forced to pay the NADAC plus $10.50 dispensing fee at the pharmacy counter when they fill their script (up to the out-of-pocket maximum contemplated by their health plan). Kansans using low-cost generics or high-deductible health plans will likely face the highest out-of-pocket costs.

In guidance issued ahead of the law’s July 1 implementation, the Kansas Department of Insurance stated that any impact on a patient’s out-of-pocket costs will depend on factors such as plan design, cost-sharing arrangements, existing dispensing fees and whether available rebates are applied at the point of sale. That may affect how costs are distributed among stakeholders, but it does not change the underlying reality that SB 20 increases required payments within the prescription drug marketplace.

Many legislators who supported SB 20 did so with good intentions. Rural pharmacy closures are a legitimate concern. Communities benefit when residents have local access to prescription medications, and policymakers should continue looking for solutions to preserve that access.

Unfortunately, good intentions do not eliminate economic consequences.

As with any tax or price-fixing policy, mandated costs roll downhill. The burden will fall on the employers and workers who finance the vast majority of private health care coverage in Kansas.

Whether these additional costs emerge through higher prices at the pharmacy counter, premium adjustments, benefit redesigns, employee contribution increases or other downstream effects, Kansans deserve to understand why.

Health care affordability remains one of the most significant economic challenges facing our state. Solving that challenge requires addressing the root causes of rising costs, increasing competition and encouraging innovation. New mandates that function as hidden taxes within the health care system are counterproductive.

While SB 20 took effect on July 1, the debate over health care affordability is far from over.

We hope lawmakers will closely monitor the impact of this legislation as costs imposed on employers and employees begin hitting family budgets and the bottom lines of small businesses in Kansas.

Kansas cannot solve health care affordability challenges by mandating price floors for certain providers. Real reform lowers costs throughout the system. Hidden pill taxes do not.

— Andrew Wiens serves as executive director of Kansas Employers for Affordable Healthcare, a registered lobbyist and director of government relations at Dugan Consulting Group

Prescription drug reforms headed to governor

Mon, 21 Sep 2026 15:51:52 GMT

Prescription drug reforms headed to governo r

Reforms tightening the regulations of the middlemen who manage prescription drug benefits for insurers and employers passed the Legislature on Tuesday with advocates saying it will keep prescription drug prices under control for Kansans.

The Senate voted 32-8 to pass a bill supporters say will hold down drug prices, help independent pharmacies compete and address concerns about pharmacy benefit managers that have drawn increasing attention nationally from regulators as well as state and federal lawmakers.

The House passed the bill 104-17 across party lines Monday night. The legislation regulating pharmacy benefit managers – also known as PBMs – now goes to the governor.

“There is no regulation on these PBMs, and they are billion-dollar companies,” said Republican state Sen. Brenda Dietrich of Topeka, chair of the Senate’s financial institutions committee.

“We needed transparency. We needed regulation. We needed auditing, and we needed to have some way to look at what PBMs were doing in regards to our local pharmacies.”

Opponents say the bill imposes price controls and subsidizes the insurance industry that will later raise prices anyway. They objected to a $10.50 drug dispensing fee and questioned why businesses subject to a federal law that sets minimum standards for self-funded health plans were exempt.

“Kansas Employers for Affordable Healthcare is disappointed in the passage of this legislation, particularly the pill tax provisions,” said Andrew Wiens, who represented the group at the Capitol.

“We’re proud to have fought on behalf of Kansas small businesses, employees and families who will ultimately bear the cost of the pill tax,” Wiens said.

“Moving forward, we will work to keep our members informed as these costs show up in higher premiums and out-of-pocket expenses,” he said.

The bill would impose a tighter set of regulations for pharmacy benefit managers, which serve as a bridge between drug manufacturers, pharmacies, health plans and patients.

“Unfortunately, it’s a federal-government enabled monopoly and it hurts us consumers, it hurts our constituents,” said Republican state Sen Bill Clifford of Garden City.

“I’m tired of them having this monopoly power. It’s about time we acted,” he said.

Pharmacy benefit managers have been around since the 1960s.

They negotiate rebates and price discounts with drug manufacturers, process insurance claims, reimburse pharmacies for drugs dispensed to patients and craft drug benefit plans that include developing a list of the covered drugs.

Insurers pay pharmacy benefit managers to manage their prescription drug benefits, which includes negotiating rebates, managing the list of covered drugs and dealing with prescription reimbursements.

But pharmacy benefit managers have come under a microscope in recent years from regulators and lawmakers , who blame PBMs for the rising cost of drugs and directing patients to their affiliated pharmacies while hurting independent pharmacies.

It’s a complicated and divisive issue that policymakers at the federal and state level are struggling to address as they respond to the public’s call for lower prescription drug prices.

It’s an issue that’s drawn more than 400 local pharmacists wearing white lab coats to the Capitol this session to lobby for a bill that they said would keep them open.

“We need reform,” Republican state Rep. Angela Stiens of Shawnee told the House on Monday.

“We need to bring accountability to a system that operates in the shadows, often at the expense of taxpayers, patients and local pharmacies,” Stiens told the House early Monday evening.

“At its core, this is about protecting access to care, lowering out-of-pocket costs and making sure the system works for our patients, not just the middlemen,” she said.

Federal regulators said in a 2024 report that PBMs exert “substantial influence over independent pharmacies, who struggle to navigate contractual terms” they impose.

The report said those pharmacies find the contract terms “confusing, unfair, arbitrary, and harmful to their businesses.” Between 2013 and 2022, about 10% independent retail pharmacies in rural America closed.

The country’s top three PBMs — CVS Caremark, Express Scripts and OptumRx — manage 79% of prescription drug claims for about 270 million people, federal regulators said.

A separate congressional report from 2024 found that PBMs “have intentionally overcharged or withheld rebates and fees from many taxpayer-funded health programs.”

The report found that “PBMs have sought to use their position to artificially reduce reimbursement rates for competing pharmacies.”

The report concluded that in these taxpayer-funded health programs, PBMs “use their position as middlemen to steer patients to the pharmacies they own rather than pharmacies that may have closer proximity or provide better care.”

There also have been legal issues, in Kansas and nationally.

Last month, the Federal Trade Commission settled a lawsuit with one of the nation’s largest pharmacy benefit managers, Express Scripts Inc., and its affiliated companies.

The settlement required Express Scripts to adopt fundamental changes to its business practices that increase transparency and are expected to reduce patients’ out-of-pocket costs for drugs like insulin by up to $7 billion over 10 years.

The FTC alleged that the PBM artificially inflated the list price of insulin drugs by using “anticompetitive” and “unfair” rebating practices that hurt patients’ access to lower list price products for drugs.

Five years ago, then Kansas Attorney General Derek Schmidt reached a settlement with Centene Corp. regarding pharmacy benefit management practices for the state Medicaid program. He reported recovering $27.6 million.

The settlement was the result of a yearslong investigation into the company’s business practices undertaken by Schmidt’s office after a separate investigation in Ohio revealed PBMs were overbilling that state for their services.

In general, Schmidt accused the company of failing to satisfy its obligation to represent the state’s best interests in negotiations with other companies that supply drugs to the state Medicaid program.

Insurance Commissioner Vicki Schmidt, a Republican candidate for governor this year, lobbied for the bill in the Legislature.

She celebrated passage of the bill Tuesday.

“This week, the Kansas Legislature chose to put patients over politics and profits,” Schmidt said in a statement.

“No longer will Kansas let PBMs threaten the pocketbooks of patients, the livelihoods of local businesses and the viability of rural communities,” she said.

Nationally, all 50 states have passed legislation to regulate pharmacy benefit managers, although the scope of those regulations vary widely, according to the National Academy of State Health Policy.

Critics say that PBMs emphasize making money through practices such as “spread pricing,” holding on to drug manufacturer rebates and sending patients to their affiliated pharmacies – three issues the Kansas legislation attempts to address.

In 2022, Kansas enacted a law that required the licensing of PBMs. There are currently 54 licensed PBMs in Kansas, but the insurance commissioner said the law gives state regulators little ability to oversee them and address consumer complaints.

The bill approved by the Legislature does several things:

Bans so-called “spread pricing,” the difference between the lower rate a PBM pays for a drug to the dispensing pharmacy and the amount it charges insurers for that drug. The difference is the profit made by the PBM. The insurance commissioner said that because there is no requirement to disclose those differences, employee health plans likely pay higher costs that don’t reflect the actual cost of their medications. Just 16 states ban spread pricing.
Implements new data reporting requirements for PBMs. The bill requires annual and quarterly data reports to be submitted to the Department of Insurance. The department could use the information – along with information from health plans – to verify that the rebates were being passed through to the health plan. Among other things, PBMs would have to report the difference between how much they pay pharmacies for prescription drugs and the amount they charge the health plan as well as the methodology for calculating the cost to the health plan.
Requires PBMs to charge a health plan the same amount for prescription drugs as they do a pharmacy. The bill prohibits PBMs from reimbursing a pharmacy or pharmacist any amount less than the National Average Drug Acquisition cost for the prescription drug at the time it’s dispensed plus a dispensing fee of not less than $10.50 – the same rate that Medicaid charges for dispensing fees. Supporters of the bill said it assures that patients can fill prescriptions at pharmacies of their choice, rather than being steered to pharmacies affiliated with the PBM. The bill also prevents PBMs from paying an affiliated pharmacy more than a local pharmacy.
If a PBM violates the law, the insurance commissioner could impose a fine of not more than $1,000 for each and every violation. The bill would remove the limit of $10,00 for those violations.

The Legislature’s action comes weeks after Congress approved several new regulations related to Medicare Part D patients and PBMs that included measures decoupling PBM compensation from drug prices and requiring PBMs to pass through 100% of rebates to employer health plans.

Critics of the bill have seized on the $10.50 dispensing fee, calling it a “pill tax.” They said it would be passed on to small businesses and their employees.

They also questioned why the bill exempts self-funded health plans that are subject to regulation under a federal law that sets minimum standards to protect individuals enrolled in those plans.

“You may think that you’re helping, but Senate Bill 20 is misguided at best,” said Republican state Rep. Beverly Gossage of Eudora.

“When your local municipalities, school districts, small businesses and neighbors get their increase in October…I hope that you can tell them that you joined me in voting no,” Goss

Kansas pharmacies celebrate PBM reform passage

Mon, 21 Sep 2026 15:51:50 GMT

Kansas pharmacies celebrate PBM reform passage

Kansas earlier this week joined a handful of states to pass extensive pharmacy benefit manager reform.

Senate Bill 20 , which began life as Senate Bill 360 in late January, is one of multiple PBM reform bills being debated in statehouses across the country this year. The legislation seeks to improve transparency for pharmacies, procedures for pharmacy audits and also to level the playing field financially for independent practitioners.

The bill, which received bipartisan support in both chambers — passing the House Monday night by a 104-17 vote and then the Senate on Tuesday by a 32-8 margin — now heads to the desk of Gov. Laura Kelly .

Proponents, led by independent pharmacy owners, lauded lawmakers for joining states like Arkansas and West Virginia, which already passed similar bills.

“We’ve been at this for a long time,” Joseph Gilliland , owner of multiple small pharmacies in northeast Kansas, told State Affairs this week. “Probably the biggest piece of pharmacy legislation that we’re gonna see pass through.”

Gilliland, working with the Kansas Pharmacy Association, has for years pushed PBM reform in Kansas.

Kansas businesses, labor unions and public employers rely on PBMs to manage their prescription drug benefits and save money, Andrew Wiens , who spoke on behalf of Kansas Employers for Affordable Healthcare, told State Affairs in an email this week. The organization spoke in opposition to the PBM reform bill this session.

“PBMs save employers money by negotiating price concessions with drug manufacturers, requiring pharmacies to compete on price and quality, managing formularies to favor generics and lower-cost brand drugs, reducing waste and abuse and helping patients adhere to their medications,” Wiens said. “Without the entities with expertise in using these tools, costs would almost certainly be higher for employers and employees.”

Other opponents, including the Pharmaceutical Care Management Association, say that the bill, if it becomes law, will result in increased drug and health care premium costs.

The bill mandates that PBMs use the National Average Drug Acquisition Cost (NADAC) to set reimbursement rates, and they also must pay a $10.50 dispensing fee to Kansas pharmacies each time a prescription is filled, a “price control” measure that opponents say will be passed on to employer health plans in the form of a “pill tax.”

PCMA Senior Director of State Affairs Jonathan Buxton told lawmakers during March 11 testimony that the dispensing fee could result in as much as $78 million in “excess drug spending.”

PBMs may pay the dispensing fees, but the cost will ultimately be passed to consumers, Wiens said.

“As with any other tax or price control scheme, the pill tax will end up being paid by the payers: in this case, employers with health plans and their employees,” he said. “The pill tax is a new cost in the system that will be paid to pharmacies regardless of market conditions, efficiency or negotiated pricing.”

Additionally, Wiens said patients may feel the cost at the pharmacy counter as well.

“Patients are subject to paying the additional $10.50 up to the out-of-pocket maximum contemplated by their health plan,” he said. “Patients currently using low-cost generics or high-deductible health plans will likely face the highest new out-of-pocket costs at the pharmacy.”

Proponents have long downplayed the impact of increased dispensing fees, and they say that the adjusted reimbursement rates for drugs mandated in the bill are long overdue.

Gilliland said the goal is not to put PBMs out of business. It’s to level the playing field.

“PBMs aren't bad,” Gilliland said. “They have just kind of got too big for their shoes. They do a very good job of processing claims. When you come into the pharmacy, we can process that claim instantaneously. At the point of sale, we know what we're getting reimbursed, what your copay's gonna be, and they do that very well.”

A substantial number of prescriptions filled in the United States are managed by the half dozen largest PBMs, which has led to accusations of monopolistic practices when it comes to directing health plans and deciding drug coverages and reimbursements to pharmacies.

Many of the proponents who testified on behalf of the original SB 360 were independent pharmacists who say closures of pharmacies in rural counties have increased because of the impact of PBM practices.

PBM reform legislation has been introduced at the federal level, but Gilliland said it is moving slowly, something that has prompted states like Kansas and Tennessee to accelerate their own bills in their statehouses.

“The problem is if we wait on the federal legislation to come through, it'd be too little, too late,” he said. “This is the bottom line.”

The “poison pill”

SB 20’s dispensing fee was the No. 1 hangup this week for some Kansas House members, who praised the transparency part of the bill during Monday’s debate, but decried the “tax” they said will be passed down to employers and employees at some point.

“I am all for transparency, but I am not for the poison pill of $10.50,” said Lauren Bohi , R-Olathe, as she made an unsuccessful motion on Monday to send SB 20 back to a conference committee.

Had the motion passed, the likelihood that the bill would have returned to the floor would have been slim.

That’s a story all too familiar to Gilliland, who has seen PBM reform bills in years past be introduced, gain momentum and then die.

“And every year we've gotten a little smarter and a little smarter and a little more aware…of the process…and how everything's working,” he said.

Last session, he said that a PBM reform bill’s language was changed without anyone’s knowledge two days prior to a potential vote.

This year, the legislation changed bill numbers within the Senate and bounced between multiple House committees.

There were also a lot of moving parts to the legislation, Gilliland said.

“There's a lot in this bill,” he said. “When you have an opportunity, you want to get as much out of it as you can, but also you don't want to complicate it too much.”

A packed bill did increase the risk of another conference committee delay on Monday. Had that happened, days before the session’s first adjournment was scheduled, it might have killed the bill for good.

“If it would have went back to committee, it would have been dead,” Gilliland said. “When I was watching that, and they motioned to send it back to committee, I was like, ‘if this happens, we're done.’”

Bohi’s motion failed 27-93.

She was later one of the 104 House members to vote in favor of the passage of SB 20 .

Independents’ day

One pharmacist in rural Kansas knows just about every person who walks through the doors of his small business to get a prescription filled.

His independent pharmacy is located on the main drag of a town of less than 5,000 people.

He has owned the business for over two decades, but at the end of this month, he will hand the keys over to another proprietor.

His decision to sell his business was not made lightly. It follows years of decreased revenue and profits he said are due to unfair practices by PBMs.

“I'm exhausted, trying to survive economically,” he said, requesting not to be identified due to his ongoing contracts with PBMs. “Because…the deal gets worse every year. And if we're being paid at cost, then I'm paying to keep the store open. I'm paying to fill prescriptions.”

At one time, there were 15 employees at the small business, a lot for a rural community storefront. Today, that number has dwindled to one full-time employee.

Still well short of retirement age, he said the sale will allow him to clear his debts, with plans to continue working.

Many independent pharmacies across the state are facing similar business decisions. In rural counties, where there is one or even zero pharmacies, the impact of closures on patients will be felt the most, Gilliland said.

“You’re going to start having gaps in coverage,” he said, adding that mail-order prescription services may not be able to fill all of those gaps.

Gilliland’s family business has operated in Kansas for a half century. His father was a pharmacist, and his son and niece are currently in pharmacy school.

He owns Medical Pharmacy in Holton and the business has grown over the years to include locations in Onaga, Westmoreland and Topeka. Gilliland said that he employs right around 50 people within those stores.

Gilliland said that his son wants to carry on the family’s legacy and run an independent pharmacy.

Part of doing that means staying involved politically, he said.

“(My son) went with me to Legislative Day, and he's like, ‘I had no idea that there's this much going on,’” he said. “And my biggest thing for him was, I said, ‘you know, if you're not at the table, it probably means you're on the menu…’ That is why it is so important to be involved in your profession, you know, 'cause if you're not there, somebody else is gonna make the decisions, and they're probably not gonna be good for you. Probably good for them.”

Staying involved seems to have paid off this week for Gilliland and other independent pharmacists in Kansas.

Some lawmakers called the bill’s passage a “David vs. Goliath” outcome.

If SB 20 becomes law, things could improve for dozens of small businesses teetering on the edge of closure.

“It’s going to change the way we practice pharmacy,” Gilliland said. “It’s not only a bill that is a big win for pharmacists, it’s a big win for the constituents. It truly is.”

As for other small businesses, it’s unclear how employer-sponsored health care plans might be affected by the trickle-down effect of dispensing fees.

Gilliland said that he hopes the recent legislation will draw the PBM industry to the table to craft better drug and health care policy.

As for KEAH, Wiens said, “we are always happy to discuss solutions that improve our prescription drug market without raising costs for Kansas employers and employees and their families.”

That could include “encouraging competition in the prescription drug marketplace; addressing patent abuse by manufacturers; breaking down barriers to mail-order pharmaceutical delivery, biosimilar innovation, and use of generics; and expanding market-based solutions.”

—

Bryan Davis is the managing editor of State Affairs Kansas/Hawver's Capitol Report . He can be reached at bdavis@stateaffairs.com .

Op Ed: Price controls won’t fix Rx drug costs

Mon, 21 Sep 2026 15:51:49 GMT

Op Ed: Price controls won’t fix Rx drug costs

At first blush, Senate Bill 360’s attempt to “fix” prescription drug pricing might sound appealing: protect pharmacies, promote transparency, and lower costs. Unfortunately, buried in this well-meaning rhetoric is a classic example of government price controls — a misguided policy that risks doing far more harm than good. Kansas legislators should reject the $10.50 dispensing fee mandate in SB 360 because it amounts to a pill tax on Kansans, undermines free markets, and distorts the very competition we want to foster.

Let’s be clear: SB 360 would require pharmacy benefit managers (PBMs) to reimburse pharmacies at or above a state-set reimbursement floor, pegged to a reference price like the National Average Drug Acquisition Cost (NADAC), plus a professional dispensing fee of $10.50 per prescription. Proponents call this a “fair rate” and claim it protects local pharmacies. But mandating a fixed fee in state law is not fairness, it’s price fixing.

Price controls don’t reduce costs, they shift them. Economics 101 teaches that when government dictates prices or fees, those costs don’t vanish; they are transferred somewhere else in the system. In this case, employers and ultimately patients will bear the burden. This $10.50 requirement will be tacked on to the price of drugs, meaning patients and payers will pay more out of pocket or through higher premiums.

A state-mandated dispensing fee overrides the competitive negotiations that should occur between PBMs and pharmacies. In the market today, PBMs and pharmacies (often through their own hired negotiators called Pharmacy Services Administrative Organizations) haggle over rates, service levels, and value. If a pharmacy provides superior service or convenience, it can command a higher rate. If it doesn’t, it must innovate or risk losing business. That dynamic encourages efficiency and keeps costs in check. Mandating an arbitrary fee removes incentives for innovation and competitive improvement. Why strive to reduce costs if a legislated floor guarantees revenue regardless of performance?

Price controls also inflate costs where none need exist. Low-cost generic drugs, the very prescriptions that make healthcare more affordable, will be hit hardest. Adding a flat $10.50 fee to a $5 generic prescription doesn’t just eat into savings, it effectively triples the cost. Consumers aren’t just buying medicine, they’re buying a bureaucratically-mandated surcharge that has nothing to do with the actual market value of the service rendered.

This isn’t hypothetical. Similar proposals in other states have drawn criticism from businesses and workers alike that such dispensing fee mandates act like a tax on every prescription, raising overall drug spending for employers and health plans. Reports from other jurisdictions show that prescription fee mandates can lead to millions in added costs annually, with those costs cascading down to patients and employers.

Finally, we must ask: who benefits from price controls like this? Not patients. Not small businesses. Not truly transparent markets. Price controls invariably benefit entrenched interests that can absorb regulatory costs while smaller competitors struggle to adapt. Instead of imposing broad rate mandates, policymakers should focus on real market reforms like eliminating barriers to patient-friendly mail order prescription deliveries, stopping patent abuse by drug manufacturers, increasing access to generics, and empowering policymakers and consumers with information and choice.

SB 360’s dispensing fee might be well-intentioned, but intentions do not replace economic principles. Kansas should reject this looming pill tax and embrace free enterprise, not government mandates that treat symptoms while making the disease worse.

— Helen Van Etten, former Republican National Committeewoman for Kansas

https://kaninfo.com/legislature/op-ed-price-controls-wont-fix-rx-drug-costs/

Kansas pill bill would hurt healthcare consumers, businesses | Opinion

Mon, 21 Sep 2026 15:51:47 GMT

Kansas pill bill would hurt healthcare consumers, businesses | Opinion

Kansas manufacturers are used to managing costs we can’t control — raw materials, supply chain disruptions, global competition, and increasing tariffs.

But there’s one cost that keeps rising year after year and increasingly threatens our ability to invest, hire, and grow: healthcare.

Now, Kansas lawmakers are considering legislation — Senate Bill 360 — that would make the problem worse by imposing a new “pill tax” and government price controls on prescription drugs in the commercial insurance market.

While the bill is being discussed under the banner of “accountability,” its real-world impact would be simple and painful: higher prescription drug costs for Kansas employers, employees, and their families.

Integrated Components is a Wichita-based manufacturer that machines high-quality parts for customers across industries, including aerospace.

Like many Kansas employers, we offer health insurance because it’s the right thing to do — and because attracting and retaining skilled workers depends on it. But every additional mandate and artificial cost layered into the healthcare system makes that commitment harder to sustain.

At the center of this proposal is a requirement that pharmacies be reimbursed at least the national average drug acquisition cost plus a mandated dispensing fee of $10.50 for prescriptions.

That may not sound like much at the pharmacy counter, but across millions of prescriptions, it adds up fast.

This isn’t theory. Research shows that if a $10.50 dispensing fee were imposed nationwide in the commercial market, prescription drug spending would increase by nearly $16 billion in a single year.

Those dollars don’t come from thin air. They come directly from employer-sponsored health plans—and ultimately from workers’ paychecks and family budgets.

Supporters argue that SB 360 is needed to help pharmacies.

But mandating a one-size-fits-all fee is not reform, it’s a guaranteed price increase written into law.

In most markets today, dispensing fees and reimbursement rates are negotiated between pharmacies and health plans.

That negotiation allows flexibility, competition, and cost discipline.

A state-mandated fee replaces all of that with a government-set floor that guarantees higher spending regardless of efficiency or outcomes.

We’ve already seen what happens when states go down this road.

In 2022, West Virginia enacted a similar law requiring reimbursement at national average drug costs plus a mandated dispensing fee.

The result? An estimated $113 million increase in prescription drug spending in just one year — paid by employers and patients.

Kansas should take that lesson seriously. The timing could not be worse.

Prescription drugs already account for a growing share of healthcare costs — nearly one-fourth of all commercial health spending.

Employers are struggling to keep up with premium increases, and many workers are seeing higher payroll deductions and out-of-pocket costs as a result.

Adding a pill tax on top of an already strained system will only accelerate that trend.

For manufacturers, this matters.

Rising healthcare costs crowd out wage growth, capital investment, and job creation.

They make it harder for Kansas companies to compete with firms in other states and countries that don’t face the same cost burdens. And they put more pressure on families who are already stretching their budgets to cover groceries, housing, and childcare.

Kansas lawmakers should be clear-eyed about who pays for this policy. It’s not insurance companies.

It’s not the state budget. It’s employers trying to do right by their workers—and employees picking up prescriptions for their kids, spouses, and parents.

We all want affordable, accessible healthcare. But price controls and pill taxes are not the answer. They increase costs, reduce flexibility, and lock in higher spending with no guarantee of better outcomes.

Kansas should focus on policies that lower healthcare costs, not ones that make them worse. Our employers, workers, and families deserve nothing less.

— Joshua Shorter is chief operating officer at Integrated Components.

Read more at: https://www.kansas.com/opinion/article314722218.html#storylink=cpy

Health care cost projected to rise 9%. Competition, not regulation, might be the cure.

Mon, 07 Oct 2024 20:26:03 GMT

Health care cost projected to rise 9%. Competition, not regulation, might be the cure.

If you are like the majority of Americans who are covered by an employer-sponsored health insurance plan, you may be preparing to sift through the pile of paperwork that arrives with the start of your health insurance open enrollment period.

If you are a business owner or human resources professional in charge of making decisions about the benefits you offer your employees, you may already be considering the coverage options for your health insurance plan.

Either way, you might want to hold on to your wallet.

According to professional services firm Aon, “The average cost of employer-sponsored health care coverage in the U.S. is expected to increase 9.0 percent, surpassing $16,000 per employee in 2025.”

Some costs go up as inflation rises, with the cost of wages and supplies used for medical care going up like about everything else these days. Unfortunately, even as overall inflation cools, this forecast health care cost increase would be even higher than last year’s cost hike. This will put more pressure on the bottom lines of employers and families just as relief was in sight in other parts of the economy.

This may feel like a same-song-second-verse situation, seeing as how you’ve lived through past health care cost increases around this time of year seemingly every year. Perhaps you have already resorted to setting the bar low and preparing for disappointment.

Employers can, and often do, dedicate more dollars to protect their employees from price hikes, but that is only sustainable for so long. Can we somehow change course toward a better future for health care affordability?

Some would have you believe that the way forward is through new government regulations on employer-sponsored health plans. Whether it’s mandating additional coverage, imposing price controls on medications, eliminating health plan networks, requiring certain levels of reimbursement for various service providers, stringing up additional red tape on pharmacy benefit managers, known as PBMs, banning incentives to shop at cheaper providers, or restricting mail-order prescription drugs, these “solutions” from the government only serve to drive up costs and limit options for employers and employees.

So how can we escape from this quagmire of ever-increasing costs for health care?

As the saying goes, when you’re in a hole, stop digging.

That is to say, how about we not do all of those things?

More regulation usually brings unintended consequences, and almost always raises costs on businesses and consumers.

Case in point: Congress is considering additional mandates on PBMs that could stifle the very competition that helps to keep prices in check. By imposing new layers of regulation, the government risks creating an environment where PBMs, on behalf of employers, can no longer effectively negotiate rebates from drug manufacturers, manage high-cost specialty medications, or employ cost-control mechanisms to ensure that patients receive the most appropriate and economical treatments. This will ultimately lead to higher prices for all of us.

Additional regulatory burdens will not help Kansans manage rising health care costs, and we shouldn’t sit idly by while budget-busting proposals meander their way through the halls of Congress or the Kansas Statehouse. Let’s stand up with our fellow Kansans to tell our elected officials that we can’t afford any more anti-competitive legislation that raises the cost of health care for Kansas businesses, employees, and their families.

Instead, we should take a hard look at the actual cost of providing health care as a good next step. Employers can help by seeking out innovative partners to negotiate better deals for prescription drugs, encouraging best practices that lead to better health outcomes, and linking arms with networks of cost-conscious providers that deliver quality services in an efficient manner.

By embracing free market principles and resisting the push for more government intervention, we can create a more efficient health care system. Let’s work together to keep health care costs down and maintain the high-quality and accessible care that Kansas employers and employees need.

Andrew Wiens serves as Executive Director of Kansas Employers for Affordable Healthcare, as well as Director of Government Relations at Dugan Consulting Group.

Read more at: https://www.kansas.com/opinion/guest-commentary/article292571709.html#storylink=cpy

MIKE POMPEO: Kamala Harris would crush families with big-government price controls

Mon, 07 Oct 2024 20:18:45 GMT

MIKE POMPEO: Kamala Harris would crush families with big-government price controls

When a politician promises to use government power to force "lower prices" and "transparency," you should expect the opposite outcome. Under the Biden-Harris administration, families have faced skyrocketing costs on everything from groceries to prescription drugs, yet Vice President Kamala Harris has proposed on the campaign trail that the best way to fix this is to insert even more federal control into every corner of our economy. Here's why these policies would be so devastating and lead to even higher costs for Americans.

While Harris has largely avoided the press and declined to publish policy plans on her website, she recently gave a speech outlining her economic priorities in three key areas: food, healthcare, and housing. An examination of her proposals shows that they would all be disasters.

Groceries

Harris began her remarks by acknowledging that under her tenure as vice president, "a loaf of bread costs 50% more" and "ground beef is up almost 50%." She's right — and anyone who has been to the grocery store has seen similar price increases for eggs, cereal and many other staple foods.

But instead of taking responsibility for the out-of-control government spending and failed policies that actually caused these increases, Harris instead proposed passing the "first-ever federal ban on price gouging on food." Under this "ban," bureaucrats in Washington would get to decide what constitutes gouging — or, in other words, what they think the price should be.

Vice President Kamala Harris's economic proposals would inject more big government into the lives of ordinary Americans. FILE: Harris speaks during a campaign event in Madison, Wisconsin, on Friday, Sept. 20, 2024. (Alex Wroblewski/Bloomberg via Getty Images)

Banning "price gouging" is not a new or novel idea — it’s just that when the Soviet Union was still around, we called it by its proper name: price controls. Federal bureaucrats at the Federal Trade Commission would decide a "fair" price for bread in Pittsburgh or milk in Topeka.

Price controls don’t work for very simple and sound reasons. Grocery stores operate on very thin profit margins, often just a few percentage points. So, when a federal bureaucrat tells them they must sell bacon for less than what it costs them to purchase it, they simply won’t sell bacon.

Smaller stores that rely on sales of such products to survive would go under. Customers would be left with fewer options to buy bacon at all. And as stores stop selling bacon, there would be less of a market for farmers and ranchers to produce it, reducing supply and pushing prices even higher — as competition and incentives collapse. This isn’t just theory. We literally saw it happen to the Soviet Union.

The price hikes we’re seeing under the Biden-Harris administration are driven by inflation across the market, not by suddenly greedy grocery store owners. The solution is to return to responsible, limited government and a pro-growth economic platform — not impose ruinous price controls that would set a course toward total implosion of our economy.

Healthcare

Harris’s healthcare proposals have received less attention but are just as damaging. She criticized pharmacy benefit managers (PBMs) — the companies that negotiate lower drug costs on behalf of employers and other purchasers of healthcare coverage.

I ran small businesses in Kansas and, having seen the high cost of prescription drugs for employees, I know the importance of these negotiations, and the savings they produce. Harris’s attacks on PBMs follows years of anti-PBM policies from the current administration, particularly from Federal Trade Commission (FTC) Chair Lina Khan.

While transparency sounds appealing, what she’s really proposing is for PBMs to disclose publicly — including to all drug manufacturers—the savings they secure in negotiations.

Disclosing this information would be good only for the biggest drug manufacturers. It would allow them to gain a government-created upper hand in knowing which drugs they can discount less, ultimately meaning higher prices for patients.

President Joe Biden endorsed Vice President Kamala Harris, who wants even more federal control of the economy. (Tierney L. Cross)

Additional proposals targeting the market-based, cost-saving role of PBMs have been touted by Harris allies in Congress. These proposed government mandates would eliminate market-based incentives that produce savings through competition and negotiation, hiking healthcare costs for employers and consumers by billions of dollars each year, while artificially increasing drug company profits.

Healthcare costs have already risen under the Biden-Harris administration. Government intervention would drive them even higher, making it harder for American businesses to offer cost-effective prescription drug coverage, and increasing costs for consumers and taxpayers.

Housing

Finally, Harris turned to housing costs, a fitting focus given that average mortgage rates have nearly tripled since the Biden-Harris administration took office. She proposed preventing landlords from setting "artificially high rental prices," which might sound appealing — until you consider that this means federal bureaucrats would decide what constitutes a "fair" rent.

If federal bureaucrats control housing costs, it would discourage homebuilders from entering the market. Why would builders invest their capital and time constructing homes if, after making that investment, a federal official could arbitrarily decide its valuation? Fewer homes being built would lead to even higher prices for both renters and homebuyers.

Conclusion

The consistent theme in Harris’s economic approach is clear: she believes the government knows better than the free market, and that putting the government in control will somehow lower prices.

Every leftist leader promises that just a little more government intervention will lead to better outcomes — but common sense and history tell us this approach doesn’t work. You can’t fix problems caused by socialism with more socialism. Americans should reject these reckless policies come November.

https://www.foxnews.com/opinion/mike-pompeo-kamala-harris-would-crush-families-big-government-price-controls

News Release

Wed, 17 Jan 2024 22:14:08 GMT

Kansas Employers for Affordable Healthcare Launches to Fight Against Rising Costs for Businesses and Employees

Topeka, KS – A new organization has launched to fight alongside businesses and employees facing rising costs for healthcare.

“Employer-sponsored health coverage is under siege by policies that raise costs on businesses large and small, threaten to undermine a key job recruitment and retention tool, and erode the household buying power of hard-working Kansas employees,” saidAndrew Wiens, Executive Director of Kansas Employers for Affordable Healthcare(KEAH). “KEAH will serve as a collective voice for employers to push back against anti-competitive legislation that raises the cost of healthcare for Kansas businesses, employees, and their families.”

Employer-sponsored healthcare benefits support good health among employees and their families by providing preventative care, treatment for illnesses and injuries, and access to prescribed medications. It is no surprise that a recent survey from the Society for Human Resource Management shows employers naming health-related benefits asthe most important type of benefit an organization can offer its workers.

At the same time, “health benefit costs [are] expected to rise 5.4% in 2023,” and employers should “prepare for continued accelerated cost growth,” according to a recent article from Healthcare Finance News . Many Kansas workers who are covered by an employer-sponsored health insurance plan have recently emerged from their health insurance open enrollment period and have indeed noticed a bigger dent in their family budgets. Employers, who typically cover the lion’s share of the cost of their employees’ healthcare benefits, face the same cost escalation challenges and are bracing for the impact of future cost hikes.

“In recent years, Kansas businesses have watched their healthcare bills go up while harmful legislation continues to be proposed: implementing budget-busting coverage mandates, increasing red tape, prohibiting cost-saving practices, banning incentives to shop at cheaper providers, and issuing heavy-handed regulations of employers with self-funded health plans,” Wiens said. “KEAH applauds Kansas legislative leadership for committing to 'A Better Way' in their 2023 legislative agenda to ‘protect Kansas consumers and stop new costly mandates that drive up rates.’”

“We’ve dug ourselves quite a hole with healthcare regulations, both at the federal and state levels. While we can’t totally control macroeconomic forces and put a lid on inflation, Kansas employers, small businesses, labor unions, and associations can join KEAH to fight back against price-hiking legislation and regulations. Kansans facing mounting healthcare costs are counting on us to get the job done.”

Your voice is important. If you would like more information on our work or if you want to join our efforts, please visit us at www.keah.org .

Date:January 17, 2023

Contact:Andrew Wiens

Executive Director

785-249-1534

info@keah.org

Kansas Employers for Affordable Healthcare

800 SW Jackson St., Suite 808

Topeka, KS 66612

keah

New Kansas pharmacy law well-intentioned, but pill tax in practice | Opinion

New Kansas pharmacy law well-intentioned, but pill tax in practice | Opinion ﻿

Prescription drug reforms headed to governor

Prescription drug reforms headed to governo r

Kansas pharmacies celebrate PBM reform passage

Kansas pharmacies celebrate PBM reform passage

Op Ed: Price controls won’t fix Rx drug costs

Op Ed: Price controls won’t fix Rx drug costs

Kansas pill bill would hurt healthcare consumers, businesses | Opinion

Kansas pill bill would hurt healthcare consumers, businesses | Opinion

Health care cost projected to rise 9%. Competition, not regulation, might be the cure.

MIKE POMPEO: Kamala Harris would crush families with big-government price controls

News Release

New Kansas pharmacy law well-intentioned, but pill tax in practice | Opinion