Bill to eliminate third-party pharmacy benefit managers could save state millions

Oklahoma could soon join the growing number of states backing away from using Pharmacy Benefit Managers (PBMs) to administer prescription-drug programs.  Sen. Paul Scott, R-Duncan, has filed Senate Bill 1901 to replace the state’s third-party PBMs with a direct-to-pharmacy payment system – a move he said could save the state millions and help significantly lower prescription drug prices for state employees.

“States started using Pharmacy Benefit Managers because of their promised cost savings but now many are realizing that instead of cutting prescription costs and saving states money, PBMs are putting the rebates and savings in their own pockets,” Scott said. “Drug costs are skyrocketing, and Oklahomans need help. No one should have to choose between their prescriptions and eating or paying utility bills but that has become the norm for many. It’s time we cut out the middleman and get our citizens the savings they desperately need.”

SB 1901 would direct the Oklahoma Employees Insurance and Benefits Board to collaborate with the Oklahoma Health Care Authority (OHCA) to make the change.  By July 1, 2021, the two entities would establish pricing to lower prescription drug prices for all enrollees of any health insurance plans offered under the Oklahoma Employee Insurance and Benefits Act. Scott said OHCA is already doing this for SoonerCare recipients and his proposal would allow them to do the same for all state employees.

A PBM is a third-party administrator of prescription drug programs for state and federal government employee plans, self-insured employer plans, commercial health plans and Medicare Part D plans. By utilizing preferring formularies and exclusion lists, PBMs decide which drugs consumers can receive from their plan without facing additional out-of-pocket costs.  They develop and maintain the list of medicines that can be used in a particular health system or under a particular health insurance policy.

There are five healthcare programs for state employees, and each has their own PMB (on right). They are-

• HealthChoice – Caremark

• Blue Cross/Blue Shield - Prime Therapeutics LLC

• CommunityCare – CVS

• GlobalHealth – Magellan

• Humana - Humana Pharmacy Solutions