CCAGW Urges Missouri House Health and Mental Health Policy Committee to Oppose HB 197 | Council For Citizens Against Government Waste

CCAGW Urges Missouri House Health and Mental Health Policy Committee to Oppose HB 197

State Action

February 4, 2023

House Health and Mental Health Policy Committee
House of Representatives
Missouri State Capitol
201 W. Capitol Ave
Jefferson City, MO 65101

Dear Representative,

On behalf of 35,087 members and supporters of the Council of Citizens Against Government Waste in Missouri, I urge you to oppose HB 197.  This legislation would create unnecessary regulatory barriers that will undermine the effectiveness of pharmaceutical benefit managers (PBMs) in Missouri. 

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.  PBMs could save $19.96 billion in healthcare costs in Missouri over the next 10 years. 

Provisions in the bill that require PBMS to become fiduciaries could cost the state of Missouri $158 million in excess drug spending in the first year and more than $1.8 billion over the next 10 years.  Changing the operations of PBMS to require them to become fiduciaries will result in higher operating costs that will be passed on to consumers, along with fewer options for financial structuring agreements made with a plan sponsor. 

The provisions in the bill also impact pharmacy networks by opening them up to any willing pharmacy.  PBMs make agreements with preferred network pharmacies, including independent, chain, mail-order, and specialty, to keep costs low and safety a priority.  Eliminating these agreements and requiring that all pharmacies be included in the plans is inconsistent with the purpose of PBMs and the agreements they make with pharmacies on behalf of their customers.  Pharmacies agree to charge lower prices to receive a large share of patients from a plan; if any pharmacy can participate, there is far less incentive to lower costs.  Patients on a PBM negotiated plan have the option to go to any pharmacy they choose but are not guaranteed the lower price if it is not in a contract with their PBM preferred network. 

For the above reasons, I urge you to oppose HB 197, which would insert the government further into the healthcare system and result in higher costs and fewer choices for patients in Missouri.


Tom Schatz
President, CCAGW

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