OKLAHOMA CITY – Legislation that would have dramatically changed the state’s drug reimbursement policies was vetoed by Gov. Kevin Stitt on Wednesday.
Senate Bill 2074, written by Sen. Jerry Alvord, R-Wilson, and Rep. Preston Stinson, R-Edmond, was designed to protect Oklahomans’ pocketbooks and access to their local pharmacies and ensure fair, transparent reimbursement standards, Alvord said.
Alvord said the bill addressed how pharmacy benefit managers – also known as PBMs – have “opaque rules and contractual structures (that) can disadvantage local community pharmacies and obscure true reimbursement practices.”
“A Tennessee audit found that PBMs were reimbursing their own affiliated pharmacies at dramatically higher rates — in some cases more than 16,000 percent higher than independent pharmacies for the same prescription. That tells us the money is already in the system — it’s just not being distributed fairly,” Alvord said in a media statement about the bill.
Alvord said the legislation mirrors a reimbursement framework that is already used in Oklahoma’s Medicaid program.
“If enacted, Oklahoma would join at least 14 states that have adopted reimbursement floors and roughly a dozen that require a professional dispensing fee to ensure community pharmacies are paid fairly for the medications and services they provide,” he said.
However, opponents of the measure – including the governor – disagreed.
In his veto message, Stitt wrote that the bill “represents a step in the wrong direction” and functions as a “hidden tax that would be passed on to Oklahoma families, employers, and small businesses through higher premiums and healthcare costs.”
“By rewriting the formula for prescription drug reimbursement, the state is further inserting itself into the marketplace to pick winners and losers,” the governor wrote.
Stitt said if the measure became law, it would cost the Oklahoma Health Care Authority more than $11 million during the next fiscal year.
Stitt’s veto drew praise from the business community. Chad Warmington president and CEO of The State Chamber of Oklahoma, applauded the governor for his ‘no’ vote.
“We commend Governor Stitt for his decisive veto on a policy that would have significantly increased out-of-pocket costs for all Oklahomans,” Warmington said in an email to business leaders. “His longstanding leadership on this issue reflects a clear commitment to affordability, economic growth, and fiscal responsibility. At a time when affordability is a top concern across the country, SB 2074 would’ve raised costs without delivering the kind of structural reform needed to ensure long-term sustainability.
Chamber officials, he said, recognize there are real challenges within the current reimbursement system.
“Providers need stable reimbursement, while insurers need predictability to manage costs and risk,” Warmington said. “These legitimate concerns require thoughtful solutions that put patients first.”
While the measure passed the Senate 34-3 in March and cleared the House of Representatives 87-7 in mid-April, Alvord has not said yet whether he would seek to override the governor’s veto.
The Second Session of the 60th Oklahoma Legislature ends May 29.