Red States Embrace Government-Run Healthcare, Crush Corporate Monopolies
Conservative states Ohio, Kentucky, and Mississippi ditched corporate healthcare middlemen for government-run prescription drug programs, saving $423 million while increasing pharmacy payments by 1200%. The stunning success exposes how “socialist” policies actually work when we focus on results over political labels.
July 16, 2025, 8:18 am
By Greg Brailsford
When Ohio, Kentucky, and Mississippi – three reliably conservative states – decided to take control of their prescription drug programs from corporate giants, something remarkable happened. They saved hundreds of millions of dollars while delivering better healthcare to their most vulnerable residents.
This isn’t your typical government success story. These states didn’t just tweak regulations or negotiate better deals. They essentially nationalized a key part of their healthcare systems, creating state-run pharmacy benefit managers (PBMs) to replace corporate middlemen who had been bleeding taxpayers dry.
The results speak louder than any political rhetoric. Ohio saved $140 million over two years while increasing payments to local pharmacies by 1200%. Kentucky saved $283 million in just one year. Mississippi followed suit, and now Virginia, Minnesota, and Nevada are implementing similar programs.
Here’s what makes this story so compelling: these conservative states proved that progressive policies work when we stop getting caught up in labels and focus on results. They took on some of the most powerful corporations in America – CVS Caremark and UnitedHealth Group’s OptumRx – and won decisively.
The old corporate system was a disaster for everyone except the middlemen. As Matt Stoller’s investigation reveals, these companies were charging Ohio “a lot more for drugs than they were paying the pharmacies that had bought and dispensed them.” They imposed “gag orders” preventing pharmacists from telling customers about lower-priced options. Most shocking of all, they were paying pharmacies an average of just 73 cents to dispense medication, driving local pharmacies out of business.
Ohio’s state-run system flipped this upside down. Instead of 73 cents, pharmacies now receive an average of $9 per prescription. This isn’t just better business – it’s better healthcare. When local pharmacies can stay open, patients don’t have to travel long distances for their medications. That’s especially crucial for Medicaid patients who often lack reliable transportation.
“I think it’s been a phenomenal experience for everyone involved except maybe the PBMs,” said Benjamin Mudd, executive director of the Kentucky Pharmacists Association. “I would say Senate Bill 50 has undoubtedly kept some pharmacies from closing in our state.”
The irony here is thick enough to cut with a knife. These conservative states implemented exactly the kind of government-run healthcare programs that Republicans typically denounce as socialism. Yet when faced with corporate greed that was literally killing local businesses and hurting patients, they chose pragmatism over ideology.
This exposes a fundamental truth about American politics: conservatives are often against socialist-style programs until they see them in action. Once they witness how these initiatives can benefit ordinary Americans, the ideological objections tend to fade away. It’s easy to rail against “government overreach” until you realize that private corporations have been systematically ripping off taxpayers and endangering public health.
The success of these state PBMs also highlights a troubling shift in the Trump administration. During his campaign, Trump tapped into genuine populist anger about corporate monopolies and promised to fight for working-class Americans. His supporters cheered when he attacked pharmaceutical companies for price gouging and promised to drain the swamp of corporate influence.
But once in office, Trump has taken all of the pages from the George W. Bush playbook and added a thick set of his own, consistently favoring corporate profits over his own supporters. While conservative states are proving that government-run programs can outperform private corporations, the Trump administration has moved in the opposite direction, cutting funding for essential government services and rolling back regulations on the same companies that were gouging taxpayers.
This contradiction should infuriate Trump voters. They elected someone who promised to fight corporate monopolies, only to watch him slash the National Weather Service while private companies continue to extract profits from essential services. The recent weather-related tragedies in Texas demonstrate the real-world consequences of prioritizing corporate interests over public safety.
The success of state-run PBMs proves we don’t need to accept corporate profiteering as inevitable. These programs show that government can be more efficient, more transparent, and more responsive to public needs than private corporations. There’s no logistical reason why we couldn’t expand these successes to commercial insurance or Medicare, potentially saving billions more while improving healthcare access for millions of Americans.
Ohio, Kentucky, and Mississippi didn’t let ideological labels stop them from doing what was right for their people. They looked at the evidence, saw that corporate middlemen were failing taxpayers and patients, and chose a better path. Other states should follow their lead, and voters should demand leaders who prioritize results over political rhetoric. The lesson is clear: when we move past the labels and focus on what actually works, progressive policies can deliver transformative benefits for all Americans.
Rhode Island Attorney General and likely 2026 gubernatorial candidate Peter Neronha filed a lawsuit against the largest PBMs in May, including CVS Caremark, accusing them of utilizing unfair and deceptive practices to raise the price of prescription drugs. A reliably blue state, Rhode Island has not yet considered going the route of these conservative states alongside Virginia, Minnesota, and Nevada, who have all passed legislation to implement state-run single PBMs. However, independent pharmacies in Rhode Island are drying up as the PBM cartel continues its rampage through the industry, making the ocean state a prime candidate for a state-run PBM.
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