A bill headed for Gov. Tina Kotek’s signature would ban Oregon’s low-income health insurance program from using a wonkish but high-profile technique when determining what medications and treatments to cover.
The Oregon House on Tuesday overwhelmingly passed Senate Bill 1508, which would block state authorities from considering research gauging “quality of life” when determining what the Medicaid-funded Oregon Health Plan will cover. The bill easily cleared the Senate earlier.
The bill’s passage in the House comes weeks after Congressional House Republicans only narrowly passed a similar bill backed by the pharmaceutical industry. Critics said it would undermine efforts to control drug costs and give pharmaceutical companies the upper hand in negotiations.
In Oregon, however, proponents including its chief sponsor, Sen. Deb Patterson, said the bill would help eliminate outdated practices that discriminate against elderly and disabled people.
“This is not a tool that is based on science,” Meghan Moyer, public policy director for Disability Rights Oregon, told the House health committee last week. “It has no scientific value whatsoever. And yet it has been part of the Oregon Health Plan since its inception.”
Some of the measure’s support focused on an unrelated provision included in the bill that would limit health insurance co-pays to $35 for a 30-day supply of insulin. Pharmaceutical companies and insurers have been under growing pressure over the skyrocketing price of the medication diabetics depend on.
Obscure but long controversial
The bill targets an analytical measure called a quality-adjusted life year, commonly referred to as “QALY.” It has been used in pharmaceutical development, academic research, government policy and other settings to weigh the cost of a treatment against its benefits to patients.
Proponents say quality of life measures can help guide spending of scarce health care dollars, particularly around increasingly costly prescription drugs.
Critics, however, have increasingly targeted the use of qualify of life measures at the state and federal levels arguing it devalues treatments for older people, as well as those with disabilities or chronic illness.
Such measures try to quantify how much a treatment or drug can be expected to lengthen a patient’s life and how much it improves their quality of life.
Leah Rand, a research scientist at Brigham and Women’s Hospital in Boston and a lecturer at Harvard Medical School, told The Lund Report that quality of life measures can be used by state Medicaid programs to negotiate better prices with drug companies and use those savings to expand eligibility or cover more care.
The measurement helps decision makers consider, “Is a price a reasonable price? Where were the largest health gains to be made for our spending?” she said.
She said that debates around such measures have focused on the tool as a barrier to care. But she said it can help answer important questions, such as, “Is what we’re paying aligned with what we’re getting?”
Sometimes the tool justifies high prices for treatments, she said, and other times it doesn’t. Rand pointed to research from the prominent Boston-based think tank Institute for Clinical and Economic Review, which is often used to combat high drug prices. For example, the institute’s research found that hemophilia B treatment had “low” or “intermediate” long-term value for $4 million the manufacturer suggested for its price.
But critics say quality of life measures have at times assigned a lower value to someone with a disability or illness.
Moyer said during the hearing that the tool relies on a general population survey that asks the public how they rate the quality of life for someone with medical conditions, such as autism spectrum disorder. As a result, their expanded life expectancy is given less weight.
She called that “incredibly offensive to the disability and chronic disease community.” She added that her organization’s research found that people in this group rate their quality of life on the same level as others. Moyer also pointed to a report from the federal National Council on Disability that criticized the use of the tool.
State Rep. Maxine Dexter, a physician and Portland Democrat who sits on the committee, voted for the bill but during the hearing also suggested the state needs techniques to control costs..
“How can we use objective data as much as possible to make hard decisions when we are allocating dollars?” she asked.
The bill had virtually no opposition. Backers included groups like the Oregon Health Equity Alliance and Caring Ambassadors Program, an Oregon-based group that advocates for people with chronic illness.
Big Pharma target
PhRMA, a drug manufacturing trade group, has openly lobbied against the use of quality of life measures, arguing that they are discriminatory.
A Reuters investigation in 2020 documented such efforts by pharmaceutical manufacturer trade groups, noting that it would undermine research from the Institute for Clinical and Economic Review, a watchdog think tank that often questions the rationale for high drug prices.
The Patient Protection and Affordable Care Act of 2010 and the Inflation Reduction Act of 2022 limit the use of quality of life measures in federal health care programs.
Earlier in February, the U.S. House passed a Republican-backed bill that would go further and ban the tool from being used in all federal health programs.
The nonpartisan Congressional Budget Office found that prohibiting the use of quality of life measures in state Medicaid programs would result in states having less leverage to negotiate rebates from drug companies. The office found that the bill would increase federal spending on Medicaid by $505 million through 2033.
Supporters of the Oregon bill banning the use of quality of life measures include the Partnership to Improve Patient Care, a national group chaired by former Congressman Tony Coehlo that’s been active in Congress as well. Reports in recent years have documented its ties to drug companies.
The drugmakers’ trade group, the Pharmaceutical and Research Manufacturing Association last year wrote to the Oregon Prescription Drug Affordability Board, pressing the panel to not use the measure in its work.
Drugmaker Eli Lilly, an insulin manufacturer, supported SB 1508, focusing on its provision to cap how much of the cost of the drug could be passed on to patients by insurers.
Reid Porter, PhRMA senior director of public affairs, told The Lund Report in an email that his organization has “not weighed in and has not taken a position on SB 1508.”
History in Oregon
A previous attempt to ban the use of quality of life measures from Medicaid decisions in Oregon failed last session after the Oregon Health Authority raised concerns it was too broad.
The focus of the bill is the state Health Evidence Review Commission, a panel that makes coverage decisions for the Oregon Health Plan. Experts on the panel review medical literature to gauge cost-effectiveness.
The HERC’s cost control efforts have long been a focus of the pharmaceutical industry. A decade ago, the state considered limiting high-priced medications for advanced-stage cancer patients based in part on cost-effectiveness. The pharmaceutical industry launched a publicity campaign decrying Oregon’s “death panel.”
Under the new Oregon bill, HERC staff can access research that uses quality of life measures if they have been trained in identifying bias and discrimination in medical research.
Despite concerns about the use of quality of life measures to make decisions about what the Oregon Health Plan covers, it’s been used rarely.
Jason Gingerich , the commission’s director, said his staff did an analysis going back to 2017 that found there were over 30 references.
“I would say it’s a small factor,” he said.
