CCAGW Urges California Assembly to Oppose SB 966
State Action
August 21, 2024
California Assembly
1315 10th Street
Sacramento, California 95814
Dear Assemblymember,
On behalf of the 244,520 members and supporters of the Council for Citizens Against Government Waste (CCAGW) in California, I urge you to oppose SB 966. This legislation would create unnecessary regulatory barriers that will undermine the effectiveness of pharmaceutical benefit managers (PBMs) in California and increase prescription drug costs for patients.
PBMs save money for patients by negotiating lower prices on behalf of large groups. More than 275 million Americans who obtain health coverage from their employers, unions, state government plans, and other sponsors rely on PBMs to administer their prescription drug plans. PBMs use various tools like rebates, pharmacy networks, drug utilization review, formularies, specialty pharmacies, mail-order, and audits to drive down drug costs, improve quality, increase patient medication adherence, and prevent fraud.
SB 966 will cost the state almost $191 million in excess drug spending in the first year, more than $11 billion in total drug spending over the next 10 years and increase premiums by $3 billion annually. The bill would restrict the use of preferred pharmacy networks meaning PBMs won’t be able to negotiate on behalf of patients and provide the substantial savings they do today. Restricting this cost-saving practice takes choices away from patients and limits how employers and other plan sponsors can compensate their PBMs for their services.
For the above reasons, I urge you to oppose SB 966, which would insert the government further into the healthcare system and result in higher costs and fewer choices for patients in California.
Sincerely,
Tom Schatz
President, CCAGW
