Independent pharmacist Odette Leonelli owns a small pharmacy in Redondo Beach. Like many small businesses, the pharmacy has struggled in recent years due to economic hardship, but they have survived. The bigger threat to small pharmacies, according to Leonelli, is not the economy, but the abusive auditing practices of large pharmacy benefit managers (PBMs), the companies who control a large portion of the prescription drug industry in this country, including pricing and pharmacy reimbursement rates.

According to Leonelli’s opinion piece in the Redondo Beach Patch this week:

Small, independent pharmacies like mine have survived many economic downturns-including the Great Recession-and have adapted to technology and the changing needs of our customers. But we face a formidable foe in the large pharmacy benefit management companies (PBMs) that manage prescription drug benefits for more than 215 million Americans. PBMs manage prescription insurance claims, and pharmacies of all sizes must enter into contracts with them in order to serve patients.

Leonelli goes on to describe the frequently unfair PBM auditing process, which has a direct impact on the pharmacy business, particularly smaller, independent pharmacies. Leonelli argues that PBMs use this process to “bully” smaller pharmacies:

Right now, there are no uniform auditing standards, so pharmacies are subject to whatever “rules” a PBM sets up. Because the PBMs keep the money they recover from a denied claim, they have a strong financial incentive to deny every claim.

…

As a result of abusive audits, pharmacies are required to spend excessive amounts of time documenting each pharmacy claim and surviving the audits.  This is time that would be much better spent on patient counseling and care.

So, for relief, we are asking our state legislators to support state Sen. Curren Price’s bill to establish fair standards for pharmacy audits and prevent claims from being denied based on minor technicalities. SB1195 maintains the right of a PBM to audit the claims of pharmacies to identify fraud and invalid prescriptions, but takes away the incentive for the PBMs to deny as many claims as possible. It brings fairness to the audit process.

This legislation is pro-small business, pro-patient, and will not cost taxpayers a dime. It deserves the full support of the Legislature.

To learn more about how PBM’s are hurting California’s independent pharmacies, and find out what you can do to help, please visit Pharmacy Choice and Access Now.  

America needs to make things again.

Why? Because the kinds of jobs that send kids to college and provide a secure retirement are not minimum-wage jobs. Creating high-wage jobs, middle-class jobs and steady year-round jobs will take revitalizing the American manufacturing economy.

The average wage for manufacturing work in America is 20 percent higher than the overall average wage – a premium that reflects the tremendous value added to our economy from the manufacturing sector. Each manufacturing job produces up to four other jobs and, according to a recent report, each $1 spent in manufacturing creates $1.43 in other sectors. That’s a “multiplier effect” nearly twice that of other parts of our economy.

When we make things, we keep vital skills in this country. We keep our balance of trade healthy – so we have control of our economic future. We keep the high-wage manufacturing industries that fund research and development, so our economy doesn’t fall behind.

And manufacturing isn’t just big factories anymore. The “buy local” and “maker” movements have shown the tremendous economic and creative energies released, and the environmental benefits gained, when we stay local.

Manufacturing is also one of the few sources of steady and secure jobs for those who do not graduate from four-year colleges – and that helps build a just economy that creates opportunity for everyone.

Of course, we are not going to bring every manufacturing job back. And we might not want to invest our national efforts in the very lowest wage manufacturing jobs. But we can target the kinds of jobs that will help create a path for American families to the middle class.

That’s exactly the path my own family followed. When I was young, we lived in a trailer in a logging town on the coast of Washington State. I watched my dad start a small trucking business with a single truck he drove himself. Through his hard work, I was able to go on to college, earn a degree in chemical engineering and then an advanced degree – and use my education to start a company that created technology to help U.S. manufacturers compete in the global market place.

Later, I co-founded the Center for Entrepreneurship and Technology at UC Berkeley – and today, I teach bright young engineers and entrepreneurs the skills they need to maintain America’s lead in technology.

All of my experience creating jobs and sparking innovation has led me to one simple conclusion. We can’t outsource our way to prosperity. We need to do more than just design, and then consume, products. We need to make things again.

As tough as the American economy is right now, there is reason for hope when it comes to Making More in America again. Over the past two years, the economy has added 334,000 manufacturing jobs – the strongest two‐year period of manufacturing job growth since the late 1990s. Manufacturing production grew 5.7 percent on an annualized basis since its low in June of 2009, the fastest pace of growth of production in a decade. But we still have a long way to go to recover from the more than two million manufacturing jobs lost in the recession.

Consider this math: if we could return to the level of the late 1970s when about 20 percent of jobs were in the manufacturing sector – we would create 12 million new jobs directly and spur another 30 million new jobs in downstream support services. Why is that number so important? Because that’s just about the number of jobs we need to restore and create over the next ten years to get back to full employment in the U.S.

To get there, we need more than promises.

That’s why I’ve published a detailed plan at www.StaceyLawson.com designed to restore the manufacturing jobs that sustain the middle class – manufacturing employment. It’s called “Making More in America,” and it lays out seven major priorities to get us there.

Restoring our manufacturing economy won’t be easy, and it isn’t the only thing we need to do – it is just a start. But if we care about restoring the middle class and creating the kinds of jobs that pay decent living wages – wages that help buy houses, pay college tuitions, fund decent retirements – this is exactly where we should start. So let’s get going.

Stacey Lawson is a Congressional candidate in California’s newly drawn Second District.  She is an educator and small business owner living in San Rafael, CA.

You can download a copy of Stacey Lawson’s “Making More in America” jobs plan here: http://staceylawson.com/making-more-in-america-jobs-plan/

We’ve got a lot going on at Yee campaign headquarters these days with our official kick-off event this Saturday, May 7 at 10:30 AM. Click here to RSVP.

Our social media question time topic this week is small business.  What do you think we should do to improve the climate for small business growth in San Francisco?  What questions do you have for Leland about his policy positions on small business?

Enter your questions or ideas in the comment thread and we’ll respond to three of the questions next week.

NEWS RELEASE

Lutz for Congress 2010

http://www.VoteRayLutz.com

Media Contact: Brennan Purtzer, Media Director

619-447-3246 / [email protected]

FOR IMMEDIATE RELEASE

Lutz slams Filibuster of $30B Bill for Small Business

REPUBLICANS ARE “SABOTAGING” OUR ECONOMY FOR POLITICAL GAIN

FIDUCIARY RESPONSIBILITY VIOLATED BY REPUBLICANS, SAYS LUTZ

SAN DIEGO COUNTY (July 29, 2010) – “This is destructive and intentional: I’m telling you all – it’s sabotage,” said Ray Lutz, the Democratic Challenger to California’s 52nd Congressional Seat (East San Diego County). Lutz was responding to Senate Republicans who filibustered a bill that would create a $30 billion lending fund for small businesses.

“These clowns are working against America, fighting a bill to help the small business fabric of America, the workhorse of job creation,” Lutz said. “While they cater to their Wall Street masters, they are shirking their fiduciary duty to work FOR America. Republicans are hoping the recession “double-dips” before November, so they can ‘win.’ The fact that our political system produces officials who actively work against our economy shows us that the system is truly broken.”

Lutz has proposed a green energy plan that would create 1.5 million jobs and cure the nation’s dependency on foreign oil, pushing for solar and biofuel development in a modern “war on energy.” “We have plenty of work to do, plenty of jobs in our new green economy, but we need to embrace the future and move away from our broken past. My opponent, Duncan D. Hunter, is part of that past and part of the ‘just say no’ Republican Party that is betting against our country.”

The Lutz campaign has a VIP and fundraiser event tomorrow, Friday, July 30, 4-7p.m., in San Diego’s Gaslamp District at the Tequila 100 Bar & Grill, 756 Fifth Ave. Everyone is invited.

Donations to Ray Lutz’ campaign can be made at:

http://www.voteraylutz.com/Don…

Ref: http://www.msnbc.msn.com/id/38…

Yesterday’s Democratic Senate caucus meeting – combined with Majority Leader Reid’s push on this issue, combined with President Obama’s leadership, combined with a clear demand by the public for action – has given comprehensive clean energy and climate legislation a major boost as we head towards the 4th of July recess. Clearly, at this point, there’s a better path to 60 votes in the U.S. Senate for comprehensive clean energy and climate legislation than ever before. We are that close to making history, let’s make sure we seize this moment!

With all that in mind, a recent national survey by Al Quinlan of Greenburg Quinlan Rosner Research has potentially powerful implications for the 2010 elections, providing yet more evidence that climate legislation – despite a fallacious “mainstream media” narrative arguing otherwise – is actually good politics. The key findings are threefold (note: the document talks about strategy for the Democratic Party, but could apply to Republicans as well):

1. Small businesses “are among America’s most popular entities,” with an eye-popping 44:1 favorable to unfavorable ratio (“the highest we have ever seen in our polling on any topic”)
2. Generating support from small business owners, for either political party, is a key to success in the upcoming mid-term elections.
3. Small business owners strongly agree “that a move to clean energy will help restart the economy and lead to job creation by small businesses.” In fact, according to Greenburg Quinlan, “One of the most surprising findings of the survey is that despite the fact that nearly two thirds of business owners believe it would increase costs for their businesses, a majority still want to move forward on clean energy and climate policy.”

As if that’s not evidence enough that there’s broad support out there for comprehensive, clean energy and climate legislation, how about this Benenson Survey Group survey, conducted in late May/early June 2010? The key findings of this poll are:

• 65% of “likely 2010 voters” believe that “the federal government should invest much more than it currently invests [or] somewhat more than it currently invests .”
• 63% of “likely 2010 voters” support an energy bill that would “limit pollution, invest in domestic energy sources and encourage companies to use and develop clean energy…in part by charging energy companies for carbon pollution in electricity or fuels like gas.”
• Among “undecided voters,” “62% support the bill and just 21% oppose.”

There is also strong evidence from this polling that voters – including independent voters by a 2.5:1 margin – are strongly inclined, by around a 2:1 margin, to be “more likely to re-elect” their Senator if he or she voted for a strong, comprehensive, clean energy and climate bill.

In sum, solid majorities of small businesspeople and the public at large both support comprehensive, clean energy and climate legislation. Which is why, once again – as we pointed out yesterday – the “mainstream media” narrative, that voting for limits on carbon pollution is bad politics, is just dead wrong. To the contrary, victory this November could go to the candidates – and the party – that seizes this issue and makes it their own. Ideally, it would be great to see both Republicans and Democrats fighting to be the “greenest” candidate, and not just in terms of how much money they raise.

UPDATE: Add another poll to the list, this one by WSJ-NBC indicating that “Respondents favored comprehensive energy and carbon pollution reduction legislation by 63 percent to 31 percent – a two to one margin.”

(From our friends at the Union of Concerned Scientists – promoted by Brian Leubitz)

First of its kind economic analysis shows significant cuts in global warming pollution will cost small businesses only pennies

Los Angeles County  –  As international climate treaty negotiations begin in Copenhagen amid controversy over economic impacts, a new report shows that the costs for small business operating under California’s landmark climate law (AB 32) can be measured in pennies. Conducted by leading economists and released by the Union of Concerned Scientists (UCS) today, the report finds that AB 32 policies will only increase the percent of small business revenue spent on energy by only 0.3 percentage points–from 1.4 to 1.7 percent–in 2020.  In a case study which examines a real world small business–Border Grill restaurant–the report finds AB 32 will cost diners a mere 3 cents extra per $20 meal in 2020.

The analysis, The Economic Impact of AB 32 on California Small Businesses ( www.ucsusa.org/small_business ), a peer-reviewed first-of-its-kind analysis, uses empirical data on the cost characteristics of small businesses to estimate the economic impacts of AB 32 and was commissioned by UCS and conducted by The Brattle Group, an international economic consulting firm.

“Our report finds that the incremental cost impact of AB 32 on the average California small business will be relatively small and definitely manageable,” said Jurgen Weiss of the Brattle Group, and co-author of the report.  “The AB 32 cost impact pales in comparison to the effect of inflation over ten years, and falls well within the range of historic cost variation most small businesses face everyday regardless of climate policy.”

The Brattle Group projected the likely changes in electricity, natural gas, and gasoline prices due to the major AB 32 policies: cap and trade (which puts a price on carbon), a 33% renewable energy standard, increased energy efficiency measures, and a low-carbon fuel standard.

(more…)

Report Highlights

~~ Most small businesses will not be directly regulated under AB 32, therefore AB 32 policies will only impact them indirectly to the extent that these policies cause energy prices (electricity, natural gas, transportation) to change.

~~ The average small business spends less than 1.5 percent of revenues on energy-related costs.  So any increase in the price of energy will have a modest financial impact.

~~ Increases projected in electricity, gas and transportation fuel costs due to AB 32 are lower than recent increases in the same rates caused by factors wholly unrelated to environmental regulations.

~~ Increased costs of intermediate products used by small business (food, supplies and services) that result from higher energy prices will also have only a modest impact on small business.

“Energy efficiency is one of the key ways businesses can save money on energy costs” said Jasmin Ansar, a climate economist with UCS.  “This report does not fully reflect the potential cost savings to small businesses from energy efficiency, so even the modest increases forecast by the study overstate the likely cost of AB 32 to small businesses.”

The report includes a case study of Border Grill, a Los Angeles-based Mexican restaurant, chosen because restaurants are more energy intensive than the average small business and represent the largest share of employment in any small business category – 10 percent of total statewide employment.  After auditing five years of the restaurant’s electricity and gas bills, The Brattle Group developed a 10-year business projection based on historical data, and used this projection, along with macro-economic assessment of change in energy prices, to develop the case study results.

The analysis found that by 2020, the cost of a typical dinner at the Border Grill would rise less than 0.1 percent-or less than three cents for every $20.

“Such a miniscule increase, even if noticed, would not cause our customers any heartburn,” commented Border Grill owners and head chefs Mary Sue Milliken and Susan Feniger. “We’re known as the ‘Too Hot Tamales,’ and we’re worried about a Too Hot Future. Our customers are just as worried as we are, and would be more than willing to pay an extra 3 cents to help avoid the most catastrophic impacts of global warming.”

According to the report, in 2020, Border Grill will be spending 2% of its revenue on energy.  By investing in a robust set of efficient appliances, vehicles, and other equipment, the restaurant will be able to use even less energy and improve its productivity and competitiveness.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

This report debunks the myth that some large businesses are spewing, claiming that AB 32–the state’s Global Warming Solutions Act–will hurt small businesses.  

For more info, go to  www.ucsusa.org/small_business

I just came from the Capitol press conference on the sham of a report about the supposed cost of regulation in California. Not surprisingly conservatives and business groups are touting the study, as “evidence” that we need to de-regulate California and they took great glee in perpetuating a tired myth – California is a bad place to do business. The problems with the study are numerous, as noted in previous Calitics posts . The study takes much of its data from right-wing think tanks and Forbes magazine, not exactly subjective sources. It is purposefully vague in naming specific regulations that are supposedly so burdensome to business. It doesn’t take into account the myriad benefits of California consumer, labor, environmental and wage protections. And many of the arguments it does make are completely misleading.

The familiar refrain that California is a high-tax, high-wage-state that drives businesses away is simply not supported by the facts.

MYTH: California has the highest taxes in the nation

FACT : California is a high-income state with a wide range of revenue sources. Besides local and state taxes, California collects fees, assessments and other taxes. Taking into account all of those sources of revenue, California has a very moderate tax rate. The percentage of average income Californians pay in all taxes, which is a measure of tax burden, is reasonable compared to other states. Using that measure of tax burden, California ranks number 17 behind states like Alaska, Wyoming and North Dakota that have a higher tax burden per capita.

MYTH: California’s high-taxes and cost of doing business is driving businesses and jobs to states with fewer regulations

FACT: California loses very few jobs from businesses leaving the state. In fact, only 11,000 jobs leave the state annually out of a total of 18 million jobs. That’s only 0.06% of California’s total jobs that are lost by businesses moving out of state. The biggest job creation and loss engine are businesses opening, expanding, shrinking and closing within the state due to normal business cycles-very few businesses leave the state to our neighbors.

California has lost fewer jobs than our ostensibly “business-friendly” neighboring states. California does not rank in the Top 10 of states suffering job loss from 2008-09 and three of our five neighboring states lost more jobs than California. Our low-tax neighbors of Arizona, Nevada and Oregon had over 6.5% job loss, while California only had 4%. Even notoriously low-tax, little regulation states like Florida and the Carolinas have suffered more job losses than California.  

MYTH: Businesses will not come to California because of our high-taxes and high-wages

FACT: Businesses chose their locations for many different reasons including the tax burden, but also based on other criteria such as infrastructure, education and skill level of the workforce, access to intellectual and natural resources and many others. In that regard, California has an advantage because of our natural and human resources and the high concentration of research and technology centers. In addition, California workers are among the most productive with  an annual average output that is 13% higher than in other states.  

However, we are in danger of losing our competitive edge. Budget cuts result in crumbling roads, under-funded education systems that fail to educate the workforce, traffic-clogged highways that slow delivery and inadequate housing stock. California businesses can’t be globally competitive when they don’t have the infrastructure to perform. That is what will drive business from the state.

MYTH: California already taxes everything

FACT: Actually, California has many untapped sources of revenue that other states regularly tax. We could raise billions from the following immediate changes, with little impact on small businesses:

$855 million: Oil Severance Tax of 9.9% on any oil pumping from California soil or water (California is the only oil-producing state without one.)

$2 billion: Close the corporate loophole on Proposition 13 and raise the rates on assessments of corporate property.

$1.1 billion: Impose a tax on services, similar to the sales tax. California only taxes 21 of a possible 168 services that many states tax. In contrast, Washington and New Mexico tax 158 different services.

$470 million: Raise the corporate income tax by only 0.46% which barely keeps pace with the 557% net profit corporations saw from 2001-05 in California.

TOTAL: $5.725 Billion

If there’s one thing we’ve learned from our nation’s deep financial crisis it’s that when a group of Republicans come together and start scheming about de-regulation, everyone, including small business, should be concerned. Very concerned.