May 13, 2019

Oklahoma Senate
2300 N Lincoln Blvd.
State Capitol Building
Oklahoma City, OK  73105

Dear Senator,

The Council of Citizens Against Government Waste (CCAGW) was disappointed to learn that HB 2632, the misapplied name “Patient’s Right to Pharmacy Choice Act” has progressed so far in the Oklahoma legislature that is supposedly controlled by free-market conservatives, especially when Governor Kevin Stitt (R) vetoed a similar bill, SB 841, on May 1, 2019.  While the bill is purported to restore a patient’s right to choose a pharmacy provider, it in fact limits choice and will drive up costs.  On behalf of our 25,089 members and supporters in Oklahoma, I ask that you reject this bill.

On April 3, 2019, The Oklahoman editorial board wrote, “Senate Bill 841 and House Bill 2632 would make it much more difficult for [pharmacy benefit managers] to achieve drug savings for consumers by mandating that insurers use all pharmacies, even those that don’t contract with the insurer.  Supporters argue it’s unfair some pharmacies currently are treated differently than others, but since when do we force people to buy products at a higher price when another provider will sell the same thing for less?”

Pharmacy benefit managers (PBMs) are utilized by insurance companies, self-insured employer plans, state and federal governments, unions, Medicare Part D, and others to administer prescription drug plans as part of healthcare insurance and provide a valuable service for employees, union members, and the customers they serve.  For example, through their negotiating power, PBMs lower drug prices for millions of Americans, provide choice in coverage, improve safety, and provide convenience through mail-order delivery, particularly for people living in rural areas.

HB 2632 will drive up healthcare costs for employers and other sponsors of health insurance in Oklahoma.  By establishing “minimum and uniform access to a provider,” prices will increase for everyone since prices are often based on dispensing volume.  Furthermore, paying out-of-network pharmacies the same price as an in-network pharmacy would negate any reason for a pharmacy to join a network and reduce a PBM’s ability to negotiate lower drug costs.  As a result, this bill would raise costs for insurers across the board, increase premiums for everyone, and reduce choice.

For example, when individuals are choosing healthcare coverage, perhaps from their employer, union, or in the individual market, and they are responsible for a portion or full cost of the premium, they weigh coverage, value, and yearly cost for their health plan.  Someone who uses little healthcare and few drugs will likely be more focused on monthly premium costs, rather than drug coverage.  Those that must routinely use pharmaceuticals may accept a higher premium that provides more drug coverage and a wider choice of pharmacies.

The legislative analysis of HB 2632 estimates that it would cost the state $350,000 annually to implement the plan, since it significantly increases the duties of the Oklahoma Insurance Department.  Even worse, the Office of Management and Enterprise Service believes it will cost HealthChoice, the state’s public sector group health plan, an additional $7.2 million to implement.

Let’s be clear, this legislation is nothing more than crony capitalism at its worst.  It is designed to protect certain pharmacies from competition and will drive up costs for everyone.  I urge you to reject HB 2632.

Sincerely,

Tom Schatz
President, CCAGW

cc: The Honorable Kevin Stitt
Governor of Oklahoma

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