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Regulatory initiatives aimed at increasing oversight are gaining traction across both Democratic and Republican states.
Recently, a number of GOP leaders and commentators have begun to adopt stances that echo those of progressive Democrats, particularly concerning fiscal policies. Notably, some Republicans in Congress and the Trump administration have indicated a willingness to elevate the federal income tax rate for high-income earners. This shift reflects a broader appetite for populist policies, with proponents contending that wealthier individuals should contribute more taxes, even if they currently shoulder a significant portion of the tax burden.
Steve Moore, a prominent figure in conservative economics, likened the proposals to the economic principles championed by Bernie Sanders, while Steve Bannon, a former advisor to Trump, advocated for Republicans to align with the progressive view on taxation, suggesting it could yield political advantages for the party.
This trend isn’t confined to the federal level; various state governments are also witnessing a rise in legislation that expands regulatory frameworks. Extended Producer Responsibility (EPR) is a prime example of this. This legislation, which mandates the implementation of fees based on the extent of plastic packaging used by products, has gained a foothold in five predominantly Democratic states. The first to enact such measures was Maine in 2021, soon followed by Oregon, California, Colorado, and Minnesota. As discussions continue, the possibility of these laws propagating to seven states hinges on actions from two Democratic governors, including one eyeing a presidential run in 2026.
In Maryland, legislators recently approved EPR legislation, now awaiting the decision of Governor Wes Moore. Likewise, Washington State has passed similar measures, pending Governor Bob Ferguson’s approval. Meanwhile, initiatives in Republican-dominated states are emerging, highlighted by a proposed EPR bill in Tennessee, signifying growing interest in such regulatory approaches even in traditionally conservative environments.
Efforts to Regulate Pharmacy Benefit Managers in Nearly 20 States
Further regulatory initiatives are notable in efforts to oversee Pharmacy Benefit Managers (PBMs) and the introduction of new pharmacy taxes, making headway in both blue and red states. For instance, the current year has seen the proposal of House Bill 163 in North Carolina, aimed at regulating PBMs by mandating higher transparency in their pricing strategies and instituting a new tax on prescriptions dispensed in the state.
Interest in regulating PBMs has surged across various states, with the National Community Pharmacy Association reporting that nearly every state has enacted some level of PBM regulations over the past few years. Currently, 16 states have legally prohibited spread pricing, a controversial PBM practice. In 2024 alone, 33 bills targeting PBMs were approved across 20 states, revealing a sustained legislative focus on this issue.
While some states are advancing regulatory measures, others, like Mississippi, have rejected similar proposals. Russ Latino, editor of the Magnolia Tribune, elucidates the complexities of PBM operations and the multitude of stakeholders involved, including private health insurance companies, government payers, and pharmacies.
Key Stakeholders in the Pharmaceutical Sector
- Third-Party Payers: This group encompasses private insurers, government health programs, and employers that self-administer health plans, collectively covering a large share of prescriptions in return for paid premiums.
- PBMs: Created to manage the intersection of insurance coverage and medication supply, PBMs negotiate pricing with manufacturers and pharmacies in order to achieve lower costs for third-party payers.
These PBMs significantly influence pricing dynamics. They negotiate rebates from drug manufacturers, and while these savings can benefit the system, the mechanics of spread pricing have generated scrutiny, especially in national discussions regarding their efficacy.
Some critics of HB 163, such as the Affordable Healthcare Coalition of North Carolina, have raised concerns about the potential for increased prescription costs attributed to the bill’s proposed pharmacy tax. They argue that such a tax could unfavorably impact consumers without any direct benefits and privilege larger pharmacy chains at the expense of independent pharmacies.
In discussions surrounding the effects of PBM regulations, Latino cautions that lawmakers should consider broader implications for the healthcare ecosystem rather than narrowly focusing on one aspect of the system. He highlights that despite criticisms, PBMs offer substantial utility that, if hindered, could disrupt the already fragmented healthcare landscape.
Anticipation looms around the anticipated vote on HB 163 in the North Carolina House on April 29. If not passed by May 8, the legislation will lapse. Regardless of the bill’s outcome, its progression reveals an emerging trend where regulatory initiatives find support even in states governed by Republican majorities, indicating a significant shift in the political landscape surrounding economic regulation.
Source
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