In case you missed it, Trish Regan, former FOX Business anchor, on the Trish Regan Show discussed a recent letter sent by a group of Attorneys General urging Congress to pass legislation that would ban pharmacy benefit managers (PBMs) from being able to own and operate pharmacies. Regan explains how vertical integration, despite what the Attorneys General suggest, actually helps reduce costs, encourage competition, and increase efficiencies in the supply chain, including the prescription drug marketplace:

“Well, you know who does not want any innovation? Some members of our political circle. And this came to my attention. I keep track of Letitia James. You may know that if you watch the show. And Letitia James is facing all kinds of troubles, right? The mortgage allegations, etc. And, there’s this little number. So, she sent out a letter here just this week, in which— it wasn’t just her, actually. The Attorney General from New Hampshire, a few others— a whole bunch of them, actually. They spanned both parties, interestingly enough, because apparently nobody there that has any authority really has any common sense. And they’re going after PBMs, and they’re going after any kind of innovation that they may be employing …They really just don’t like innovation, even though that is sort of what keeps our economy going.

“This particular section, let me see if I can pull it up for you. They actually specifically cite vertical integration without getting too wonky. Like, they’re actually calling out vertical integration. Vertical integration is what helps make, for example, a company leaner, better, more cost effective.”

Regan highlights how vertically integrated companies exist across sectors and lead to lower costs:

“Vertical integration, guess what? It wins the day. Every stinking time. You look at Tesla. Okay, I don’t care if you like Tesla or you hate Tesla. You’ve got to admire what Elon has built as a company. And what has he done? He’s integrated all over the place, right? That’s a company that has its own chips, it’s got its own software, batteries, it’s got its own darn showrooms, right? They don’t have to go through the whole dealership system. What does that do? It lowers the cost. Yes, it helps their margins, but it lowers the cost, making them more competitive, because competition is actually a good thing, Letitia, I hate to break it to you.

“… Amazon has been a great example of this. You think about the logistics service that they’ve put into place, incredible! Amazon Basics is one of their private labels that they have. And they’ve been able to reduce the cost thanks to all of these things. They get all this better competition which results in faster delivery, and it results in lower prices.

“So, I— McDonald’s, you know I— sorry, we were just talking about European food and, yes, I love it, but I also love my McDonald’s french fries. And, you know what? They’ve got their own potato farms okay? Their own meat processing plants. They’ve got their own real estate for goodness sakes. Guess what? It offers a better value. Starbucks, same thing. They’re controlling the whole supply chain out of Costa Rica for their coffee.”

Legislation that allows Washington bureaucrats to come in and dictate how private businesses can operate would only undermine competition and increase costs. Trish Regan concludes:

“This is what companies do, Letitia and Co. This is what happens, and if you want to bring drug costs down, you’re going to look at these PBMs and say, ‘Where can they actually make a difference?’So, hopefully at some point somebody wakes up, I have my doubts.”

Watch the full segment from the Trish Regan Show HERE.