Op-Ed: Texas should choose people over mandates in healthcare

Texas lawmakers are right to ask why health care keeps getting more expensive.Texas Speaker Dustin Burrows created the House Select Committee on Health Care Affordability⁠ this year, and lawmakers have already heard testimony that health costs are consuming more of family budgets. Chairman James Frank said the goal should be to address root causes instead of playing “whack-a-mole with the symptoms.”⁠That is right. The wrong answer is for Texas to copy Tennessee and Arkansas by forcing private health care companies to unwind longstanding business arrangements.A pharmacy benefit manager, or PBM, is hired by employers, insurers, unions, and government programs to manage prescription drug benefits. PBMs negotiate with drug manufacturers, build pharmacy networks, process claims, help determine formularies, and operate mail-order or specialty pharmacy services. They exist because health plans need help managing drug spending in a system where patients rarely pay directly and prices are often hidden.That is the larger issue. PBMs did not appear out of nowhere. They are a response to a government-dominated, third-party payer system that has separated patients from prices and doctors from many decisions. Federal rules, employer-sponsored insurance, Medicare, Medicaid, tax preferences, mandates, and government programs have created a system where someone else controls the dollars, so someone else controls the terms. PBMs, insurers, hospital systems and other intermediaries grow because the system rewards navigating complexity more than providing direct, transparent care.That does not mean PBMs deserve a free pass. The market is concentrated, and the largest PBMs are tied to major insurers and pharmacy businesses. The Federal Trade Commission⁠ has raised concerns about specialty generic drug markups, steering, and affiliated pharmacy revenue. Patients and independent pharmacists have legitimate complaints about opaque rebates, reimbursement, formularies, and networks. Texas has already passed PBM reforms⁠, and lawmakers should keep demanding transparency and accountability when conduct harms patients.But going after vertical integration itself mistakes the symptom for the disease.Tennessee’s FAIR Rx Act⁠, signed in May, bars companies from owning or controlling both a pharmacy and a PBM or insurer above a 5 percent threshold and gives affected firms until 2028 to divest. Arkansas passed a similar law first with Act 624. Both are now legal warning signs. A federal judge blocked Arkansas’ law⁠ after finding it likely discriminates against out-of-state companies and interferes with TRICARE. Tennessee was sued almost immediately⁠, with CVS arguing the law threatens pharmacy access and could raise employer drug costs. Express Scripts has also sued Tennessee⁠, arguing the law would limit prescription access for many Tennesseans.Texas should learn from those states before importing their courtroom experiment.These access concerns should not be brushed aside. CVS operates retail pharmacies, specialty pharmacies, mail-order services, and clinics that many patients use because they are convenient and integrated with coverage. If these arrangements are forcibly unwound, the likely result is not a cleaner free market. It is fewer locations, fewer care options, fewer mail-order choices, more confusion, and longer waits, especially for patients with chronic conditions or specialty medications.Anti-vertical integration bills do not lower drug list prices, speed generic competition, reduce hospital consolidation, unwind costly mandates, or restore the patient-doctor relationship. They tell private firms how they may organize, then hope lower costs somehow follow. That is not market reform. It is industrial policy.Vertical integration can create conflicts of interest, and those concerns should be addressed when they harm patients. But integration can also reduce transaction costs, coordinate benefits, support mail-order delivery, and help patients access specialty medications. In a system already distorted by government and third-party payment, firms often integrate to navigate policy-created complexity. Punishing that response does not fix the underlying problem.Texas should judge policies by results, not intentions. If companies mislead patients, require disclosure. If contracts are anti-competitive, enforce existing law. If public plans are overpaying, improve procurement. If patients are steered in ways that raise costs or reduce access, address that conduct directly. But do not assume vertical integration itself is the problem.A better health care agenda would move control closer to patients and doctors by making prices clearer, expanding choice, reducing mandates, and removing barriers that make care more expensive. Texas should lead on health care affordability by restoring markets, empowering patients, and strengthening the patient-doctor relationship, not by following Tennessee into a costly mistake.