State Agencies Could Join Drug Program

May 10, 2011--Senate Bill 962 would require all state agencies that purchase prescription coverage to buy those drugs through the Oregon Prescription Drug Program unless they can purchase them at a cheaper price elsewhere. The bill awaits a hearing in the Joint Ways and Means Committee.   

 

The Oregon Prescription Drug Program (OPDP), created in 2003, consolidates the purchasing power of the Oregon Educators Benefit Board, SAIF, and Oregon Health & Sciences University, serving more than 350,000 people. The Oregon Youth Authority, the Department of Corrections and Clackamas County are interested in joining.   

 

Such a program has resulted in cost savings, according to Tom Burns, director of pharmaceutical programs for the Oregon Health Authority. “It’s a program that’s cost effective,” he told the Senate Health Care, Human Services and Rural Health Policy Committee on April 14. “We’ve been working with various state agencies to get them to join. We think there’ll be savings for many agencies around the state that buy drugs.”

 

But insurance companies and the pharmaceutical industry have mounted opposition.

 

“It is not clear to us that the Oregon Prescription Drug Program is realizing better cost savings compared with most other health plans,” said Marian Blankenship, who lobbies on behalf of PacificSource.

 

Jim Gardner, lobbyist for the Pharmaceutical Research and Manufacturers of America, objected to an original version of the bill which would have mandated that agencies receiving federal Medicaid dollars participate in the program. Federal law mandates that pharmaceutical manufacturers sell pharmacy drugs at the “best price” when Medicaid dollars are used.

 

Unions support the bill because the cost savings could blunt budget cuts that impact other programs and services. Ben McCanna, the vice-president of SEIU 503-415, estimates savings of 8 percent, which could be used by the Oregon Youth Authority, for example.

 

“While that won’t be enough to buy back a majority of our cuts, it’s one thing we can do to work to protect services during this recession,” McCanna wrote legislators.