CEI Study: Government laws against pharmacy ownership would increase costs, restrict access for consumers
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Innovation is reshaping how Americans get their prescription medications. Whether picking up medications in person, ordering online, or getting same-day delivery from services like Capsule, one thing is clear: expanding choices benefits everyone.
A new Competitive Enterprise Institute (CEI) study explores a thriving pharmaceutical delivery system that offers consumers real choice and convenience. Independent pharmacies are doing well and still make up a sizable portion of retail pharmacies. At the same time, new approaches like mail-order pharmacies and combined telehealth and pharmacy offerings are making it easier and cheaper than ever for patients to obtain necessary medications. And these new innovative approaches are providing access to rural areas that lack physical pharmacies.
Invaluable to this well-functioning system is the role of pharmacy benefit managers (PBMs). PBMs own and manage most mail-order pharmacies, negotiating drug prices and running an efficient distribution network. PBMs provide convenient, reliable drug delivery to patients, making it easier for patients to stick to their treatment plan.
But some lawmakers at the state and federal levels fear that PBMs wield too much influence over products and services, and they want to ban PBMs from owning pharmacies, whether mail-order services or retail stores like CVS. Perhaps they have not considered that in some rural counties, the only pharmacy available would be in danger of closing under these laws—potentially leaving residents in those areas with no local options.
There is little evidence to suggest that worries about PBM-owned pharmacies are justified, and consumers are already protected from anticompetitive practices by existing laws.
“Banning successful business models doesn’t protect consumers; it protects competitors from competition,” said study author and CEI senior fellow Jeremy Nighohossian. “When it comes to building a system that works better for consumers, the free market is the best medicine.”