HS810 Unit 3 Stakeholder Power Map Example

Who Gains, Who Pays, Who Can Stop It: A Unit 3 Stakeholder Power Map for a State Bill Ending Spread Pricing in an Employee Health Plan

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Purdue University Global

HS810: Advanced Health Policy

Unit 3 Stakeholder Power Map

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[Date]

The composite state, its bill, committee and every dollar estimate are composite; the federal facts and sources cited are real.

Definitions

Power means a specific resource that could change the bill's outcome: votes on the committee, a contract the state signs, the capacity to sue, or rulemaking authority. Interest means the dollars or duties the bill would shift toward or away from the actor. Position is support, opposition or neutral, based on public statements, testimony and lobbying records. Stakeholder analysis guidance recommends placing actors by both power and interest so that strategy can address those who can block a measure as well as those who care most about it (Bryson, 2004).

The Bill

The bill applies only to the state employee health plan, which covers about 210,000 members. It requires the plan's pharmacy benefit manager to pass through to the plan the full amount it collects, ends spread pricing, in which a benefit manager charges the plan more than it pays the pharmacy and keeps the difference, replaces percentage-based fees with a flat administrative fee per claim, and sets a minimum dispensing fee for pharmacies. Federal regulators have described spread pricing and the vertical integration of benefit managers with insurers and pharmacies as practices that can raise costs and squeeze independent pharmacies (Federal Trade Commission [FTC], 2024).

The Map

High power, opposing:

1. The three largest pharmacy benefit managers, one of which holds the current state contract. Power: the current contract, lobbying capacity and the ability to raise administrative fees. Interest: the spread on the state contract, estimated at 18 to 26 million dollars a year.

2. The national benefit manager trade association. Power: litigation capacity and model testimony. Interest: precedent for other states.

High power, supporting:

3. The state treasurer, who chairs the employee plan board. Power: board vote and public profile. Interest: plan costs that rose 11 percent last year.

4. The senate health committee chair, a sponsor. Power: controls the committee calendar.

High power, uncertain:

5. The governor's budget office. Power: can attach or withhold the bill's fiscal note. Interest: savings scored as budget relief, but also implementation cost.

6. The plan's own staff. Power: technical testimony on feasibility. Interest: workload of a mid-contract change.

Lower power, supporting:

7. Independent pharmacies. Power: testimony and constituent stories in rural districts. Interest: reimbursement floor.

8. The state pharmacists association. Power: organized testimony. Interest: professional standing and dispensing fees.

9. State employee unions. Power: membership mobilization. Interest: premiums and copays.

Lower power, opposing or neutral:

10. Chain pharmacies, some owned by benefit managers. Power: moderate. Interest: mixed.

11. Patient advocacy groups for chronic conditions. Power: moderate. Position: neutral, concerned about formulary disruption.

A legal constraint, not an actor:

12. Federal preemption under the Employee Retirement Income Security Act. Because the bill applies to a government plan, which ERISA does not govern, preemption risk is low. The Supreme Court has also held that some state regulation of benefit manager reimbursement is not preempted (Rutledge v. Pharmaceutical Care Management Association, 2020). The map shows it as a constraint because opponents may still raise it.

The actors with the most to lose hold contracts and lawyers, while the actors with the most to gain hold stories and votes in rural districts.

How the Placements Were Made

Each placement rests on a documented source. Positions come from testimony on a similar bill last session, lobbying registrations and public statements. Power ratings reflect specific resources: the treasurer's board vote, the chair's control of the calendar, the benefit managers' contract and lobbying spending, and the budget office's fiscal note. Two placements were judgment calls. The budget office is shown as uncertain because its analysts have not yet scored the bill, and patient groups are shown as neutral because their concern is formulary disruption rather than pricing itself. Both placements will be revisited after the first committee hearing.

What the Map Suggests

The bill's fate rests on the uncertain high-power actors. If the budget office scores the bill as saving money, the governor's support becomes likely, and the treasurer's board can act regardless of the legislature by writing the same terms into the next contract. Opponents' strongest argument will be that a flat fee raises the plan's administrative costs; supporters need a clear estimate showing net savings after the fee.

Strategy Implications

1. Brief the budget office early with the spread estimate and its method.

2. Pair rural pharmacy testimony with the treasurer's cost data, so the bill is seen as a cost measure rather than only a pharmacy subsidy.

3. Prepare a response to preemption claims based on the government plan exemption and the 2020 ruling.

Limits

Interest estimates are ranges because the plan's contract terms are confidential; the method used the plan's claims data and published pharmacy acquisition cost benchmarks. Positions may change as amendments appear.

References

Bryson, J. M. (2004). What to do when stakeholders matter: Stakeholder identification and analysis techniques. Public Management Review, 6(1), 21-53. https://doi.org/10.1080/14719030410001675722

Federal Trade Commission. (2024). Pharmacy benefit managers: The powerful middlemen inflating drug costs and squeezing Main Street pharmacies (Interim staff report). Federal Trade Commission.

Rutledge v. Pharmaceutical Care Management Association, 592 U.S. 80 (2020).