CCAGW Urges Oklahoma House of Representatives to Oppose SB 1860 | Council For Citizens Against Government Waste

CCAGW Urges Oklahoma House of Representatives to Oppose SB 1860

State Action

April 1, 2022

Oklahoma House of Representatives
2300 N. Lincoln Blvd
Oklahoma City, Oklahoma 73105

Dear Legislator,

The House Public Health Committee will soon have a hearing on SB 1860. This legislation, should it become law, would impose onerous regulations on pharmacy benefit management and interfere with privately negotiated contracts among insurers, pharmaceutical benefit managers (PBM), and the sponsors they serve, including businesses, unions, state and local government, associations, and other organizations that provide health insurance to their employees or members. On behalf of the 25,263 members and supporters of the Council for Citizens Against Government Waste (CCAGW) in Oklahoma, I urge you to oppose SB 1860.

Today, pharmaceutical benefit managers (PBMs) administer plans for 266 million Americans nationwide. Various tools like rebates, pharmacy networks, drug utilization review, formularies, specialty pharmacies, mail-order, and audits drive down drug costs, improve quality, increase patient medication adherence, and prevent fraud. By negotiating on behalf of large groups, PBMs drive down costs for patients. SB 1860 would make it more difficult for PBMs to provide cost-saving services to their customers, including restrictions on mail-order pharmacies that will create barriers to access and increase costs.

PBMs require pharmacies to compete on price, thus lowering costs for patients. The “any willing provider” provision in the bill is not what it seems. This provision allows any pharmacy to participate “in network.” This mandate reduces the ability of PBMs to negotiate lower prices with contract pharmacies meaning fewer price discounts. This type of mandate leads to less competition and higher prices for consumers.

If SB  1860 is enacted into law, Oklahoma would see $117 million in excess drug spending in the first year, and $1.5 billion over the next 10 years. These costs will be passed on to consumers, who are already suffering under the highest inflation in decades.

PBMs offer pharmaceutical benefits and lower costs for patients. This legislation will increase drug costs and make it more difficult for patients to access life-saving medicine safely and effectively. For the reasons above, I ask that you oppose SB 1860.

Tom Schatz
President, CCAGW

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