To the Editor,
Small businesses like mine (Green Earth Grocery, right here in the Bronx), are the fabric of our great city. Unfortunately, those of us that survived the pandemic are now grappling with crushing inflation. To succeed, we must be able to offer employees competitive benefits packages at a stable, predictable price we can plan for.
One tool many of us heavily rely on are contract models, sometimes called “spread pricing” contracts, offered by pharmacy benefit managers (PBMs) and favored by business owners like myself who must minimize cost variability wherever we can.
Ninety-four percent of small businesses cite managing employee health benefit costs as challenging. In fact, nearly half of all small employers have taken a lower profit or suffered a loss to cover these costs over the last five years. And, nearly all of them worry that these costs will become unsustainable in the next decade.
This “spread pricing” contract arrangement allows small business owners to know exactly how much their monthly costs will be and helps insulate them from price changes from one pharmacy to the next across countless different medications.
There has been a lot of negative focus on PBMs and spread pricing in Washington, but I rarely hear people talk about the small business impact of the proposals being considered. I’m worried that adding another unpredictable cost in an already challenging economic environment could be the final straw for many of us.
Zaida Hidalgo
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