Indiana State Senate
200 West Washington Street
Indianapolis, Indiana 46204

Dear Senator,

On behalf of the 33,786 members and supporters of the Council for Citizens Against Government Waste (CCAGW) in Indiana, I urge you to oppose SB3, which would ban PBMs from utilizing formularies to reduce patient costs.  This unnecessary government overreach into the private sector will raise costs and have a significant impact on patients. 

PBMs administer drug plans for more than 275 million Americans who obtain health insurance from employers, unions, state governments, insurers, and other entities.  The number of people PBMs serve year after year is consistently growing due to the popularity of PBMs and the lower-priced drugs they provide.  PBMs save an average of $1,040 per payer and patient per year.  They provide their customers with 40 to 50 percent savings on prescription drugs and related medical costs by negotiating on behalf of the large groups they serve; the savings are then passed onto health plan sponsors and patients.  PBMs utilize a variety of tools to lower prices 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. 

This bill will ban PBMs from creating formularies, a list of covered drugs with preferred generic drug tiers to incentivize the use of generics and help lower out-of-pocket patient costs.  According to the Food and Drug Administration (FDA), generics cost 80 to 85 percent less than the price of brand-name drugs.  Banning PBMs from utilizing formularies that lower patient costs will end up increasing costs and limiting choices. 

SB3 is an unnecessary and harmful overreach into voluntary private sector agreements that have reduced costs for more than 275 million Americans.  Restricting access to generic drugs would have a negative impact on patients and raise costs.  Again, I urge you to oppose SB3.

Sincerely, 
Tom Schatz
President, CCAGW