CCAGW Urges Ohio Representatives to Oppose House Bill 505 | Council For Citizens Against Government Waste

CCAGW Urges Ohio Representatives to Oppose House Bill 505

State Action

May 14, 2024

House Insurance Committee
Ohio House of Representatives
1 Capitol Square
Columbus, Ohio 43215

Dear Representative,

On behalf of the 66,691 members and supporters of the Council for Citizens Against Government Waste (CCAGW) in Ohio, I urge you to oppose HB 505.  This legislation would create unnecessary regulatory barriers that will undermine the effectiveness of pharmacy networks in Ohio and increase prescription drug costs for patients.

HB 505 ignores the federal preemption against state laws governing health plans defined by the Employee Retirement Income Security Act of 1974 (ERISA) and restricts these self-funded ERISA and Taft-Hartley plans from imposing accreditation standards on pharmacies beyond those set by the Ohio Board of Pharmacy.  The legislation limits the use of preferred pharmacies and removes the requirement for specialty pharmacies to meet independent accreditation standards, which will raise costs for patients and threaten the quality and safety of specialty drug handling.

Pharmacy benefit managers (PBMs) use various tools like formularies, specialty pharmacies, rebates, pharmacy networks, drug utilization review, mail-order, and audits to drive down drug costs, improve quality, increase patient medication adherence, and prevent fraud.  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 provide savings for patients by allowing a specialty pharmacy to ship a drug for a given patient offering home delivery of prescriptions at a lower cost.  Restricting this cost-saving practice takes choices away from patients and limit limits how employers and other plan sponsors can compensate their PBMs for their services.  Provisions in HB 505 that restrict the use of preferred pharmacy networks and specialty pharmacies could cost Ohio millions in excess drug spending.  The bill also requires PBMs to levy a new dispensing fee determined by the superintendent of insurance, further raising operating costs that will be passed on to consumers. 

For the above reasons, I urge you to oppose HB 505, which would insert the government further into the healthcare system and result in higher costs, lower quality service, and fewer choices for patients in Ohio.

Tom Schatz
President, CCAGW