CCAGW Urges Oklahoma Legislature to Oppose Legislation Interfering With Employer-Sponsored Health Benefit Plans | Council For Citizens Against Government Waste

CCAGW Urges Oklahoma Legislature to Oppose Legislation Interfering With Employer-Sponsored Health Benefit Plans

State Action

Oklahoma Capitol
2300 N. Lincoln Blvd.
Oklahoma City, OK 73105

November 15, 2021

Dear Legislator,

On behalf of the 25,267 members and supporters of the Council for Citizens Against Government Waste (CCAGW) in Oklahoma, I urge you to oppose any attempts to pass legislation that would interfere with employer-sponsored health benefit plans, including prescription drug plans.

More than 266 million Americans who obtain health coverage from their employers, unions, state government plans, and other sponsors rely on pharmacy benefit managers (PBMs) to administer their prescription drug plans. PBMs have considerable purchasing power to lower the price of prescription drugs. By negotiating with pharmaceutical manufacturers and pharmacies and using tools like rebates, networks, drug utilization review, formularies, specialty pharmacies, and mail-order, PBMs provide cost savings for their clients that are passed onto their beneficiaries. The Oklahoma legislature should not interfere with these valuable and successful private contracts between PBMs and their clients.

On May 25, 2021, Governor Stitt wisely vetoed S.B. 821, the Patient’s Right to Pharmacy Choice Act, which would have had harmful effects on Oklahomans. The bill would have interfered and restricted the ability of PBMS to negotiate lower drug costs for their clients, who provide pharmacy benefits to their employees and members. It would have negated the use of networks created to have pharmacies compete on price, service, safety and ability, and convenience. It would have limited mail-order prescriptions that can be convenient for many patients and boost prescription drug adherence, leading to better outcomes. It would have used price controls to “equalize” reimbursements among pharmacies. If the bill had become law, health plan sponsors and patients would have seen their drug costs increase, and it would be risky for patients who need specialty drugs to be able to obtain them at any willing pharmacy since these drugs are complex, require special handling, and must be properly managed.

Legislators have been quick to use PBMs as a scapegoat for higher drug prices. But these prices are impacted by interference in the marketplace like price controls in Medicaid, Medicare Part B, Medicare Part D coverage gap, the 340B program, and the Department of Veterans Affairs. If states micromanage and manipulate the private negotiations among drug manufacturers, pharmacies, insurers and PBMs, drugs costs will be increased rather than lowered.

The better approach to lower costs has always been more competition and fewer government regulations. CCAGW urges you to respect the governor’s veto and to, in the future, not consider legislation in 2022 that would once again interfere with privately negotiated employer-sponsored drug benefit plans that use PBMs to save money for their employees

Tom Schatz
President, CCAGW

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