To the editor:
In 2024 some 31 pharmacies closed their doors in the state of Iowa. Most of these were in small rural towns. These closures are the result of pharmacy benefit manager (PBM) practices and unfair reimbursement rates.
By unfair I mean PBMs decide the reimbursement rates, and big, chain pharmacies get reimbursed at higher rate than the small, independent pharmacies for the exact same medication.
Here is how this works: if a medication costs the pharmacy $30 to stock, the PBM might reimburse the big, chain pharmacy $35 and the small-business, independent pharmacy $25. This allows the big boys to make a profit, and the little guys have to operate at a loss. The result is eventually there will be no more independent pharmacies. We need reform to level the playing field.
The past couple of decades have been tough on small communities. I grew up in a small town, and back in the day almost every small community had a U.S. Post Office, a grocery store, a hardware store and a drug store. If the PBMs succeed, the small towns and rural communities will be the big losers again.
In a rural state like Iowa, timely access to medication is a cornerstone of effective care. When you have fewer options, when treatment is delayed, changed or denied, the impact is not just inconvenient. It impacts the health of Iowa citizens.
That is why I am paying close attention to the drug-pricing policies being debated at the Iowa Capitol and in Washington D.C.
Now there is talk that the federal government should step in and set prices. In the past, the feds have tried price control, in times of war or to combat inflation. It has not gone well and normally results in unintended consequences, such as shortages, rationing or higher prices. We need free market principles, but with the middleman favoring big corporations over small businesses, it is not a free market. It is cronyism.
The advocates for PBMs say regulation will increase costs for prescriptions. Historically speaking, competition and having more options drives costs down. Having the government insert itself into anything drives costs up, a prime example would be the Affordable Care Act/Obamacare.
PBMs are the number-one reason for inflated drug prices in the U.S. today. They set the reimbursement rates. They control the supply and manipulate the system, picking the winners and losers.
When looking at decreasing drug prices, there are more favorable pathways. Instead of allowing for government price fixing, we should be focusing on the real barriers Iowans face every time they go to the pharmacy. That starts with PBM reform.
Step one: Iowa Gov. Kim Reynolds should sign the PBM reform bill. It is the right thing to do.
Scott Bates
West Des Moines
