Point of View: Bills would raise prescription drug prices
At the State Chamber, we share Oklahoma legislators' goal of making health care more affordable and accessible to businesses and their employees. Unfortunately, there are two bills working their way through the Legislature that would negatively impact the business community’s ability to contain spiraling health care costs and still offer affordable coverage to their employees and families.
House Bill 2632 and Senate Bill 841, which have already sailed through their respective legislative bodies, would increase Oklahomans’ prescription drug costs and limit the tools available to business to contain costs.
According to the U.S. Department of Health and Human Services, more than 90 percent of full-time Oklahoma employees are offered well-equipped health benefits packages from their employers. Included in that coverage is access to pharmacy benefits, which comes at a considerable expense. Many commonly used drugs are increasing in price at a rate of 12 percent annually, about 10 times the rate of inflation. Ballooning costs have become a major problem for employers and their employees. These costs can depress wages, reduce hiring and even contribute to layoffs.
Fortunately, we have a free-market solution to help control these price surges in pharmacy benefit managers (PBMs). Employers hire PBMs to negotiate with drug makers and drugstores to reduce prescription drug costs. In Oklahoma, PBMs are projected to save employers roughly $7.5 billion over 10 years.
Unfortunately, HB 2632 and SB 841 undermine PBMs by using the power of the state to rewrite private contracts, driving up prescription drug prices at significant cost to the private and public sector. While the rest of the world is trying to reduce the cost of medical services, lawmakers in Oklahoma are moving two bills through the legislative process that would increase them.
If they are successful, the impact will be immediate and very real. The cost to the state alone is estimated to be roughly $5 million annually. The cost to the private sector will be much greater and would ultimately be borne on the backs of hardworking Oklahomans.
With Oklahoma employers constantly trying to balance their responsibility of providing health and pharmacy benefits for their employees while seeking opportunities to contain costs when possible, these two bills will increase the cost of care and interject the state government into the business of private contracting. We respectfully ask Oklahoma lawmakers to take into account how these bills will harm the business community, their employees and our state’s economy.
Morgan is president and CEO of the State Chamber.