Bipartisan Support For Drug Transparency Bill Raises Hopes of Passage

A scaled back version of a 2017 bill that sought to cap drug costs will instead follow a route successful in California, requiring drug manufacturers to explain big price increases

Rep. Rob Nosse, D-Portland, has found bipartisan, bicameral support for legislation to improve the price transparency for pharmaceuticals, giving momentum to passage that eluded advocates last year.

The 2018 proposal is heavily scaled back from Nosse’s 2017 legislation, which would have set caps on how much drugmakers could charge or increase prices. House Bill 2387 passed the House Health Committee on a party-line vote, but floundered in the budget committee and never reached the floor.

Last year’s debate pitted the health insurance lobby and consumer advocates like AARP and the Oregon State Public Interest Research Group against the Pharmaceutical Research and Manufacturers of America, which won out, despite the runaway costs of drugs, one of the leading causes of medical inflation.

But since then, California was able to enact a law that forces drugmakers to explain and give notice when they hike drug prices, and now Sen. Dennis Linthicum, R-Klamath Falls, and Rep. Ron Noble, R-McMinnville, are willing to back House Bill 4005, the new transparency measure which forces drugmakers to provide similar information to Oregon state officials.

“Republicans have constituents who are struggling to pay for their medications,” Nosse told The Lund Report. “I believe it’s going to pass pretty clean. I haven’t heard a lot of deep opposition, but I can’t tell how hard PhRMA is lobbying behind the scenes.”

Linthicum and Noble come from different wings of the Republican Party. Noble is attempting to burnish his moderate credentials in a Republican-leaning district that backed Measure 101, the Oregon Health Plan ballot measure that passed last month. Linthicum’s district in rugged Lake and Klamath counties may be the most conservative district in Oregon, but the freshman senator showed a libertarian streak in his support for criminal justice reform last year.

He is also a diabetic, and insulin has long been an expensive burden. “I believe in free markets, but today’s prescription drug market is broken. Decades of lobbying has resulted in a protectionist system where drug makers have monopolies for years, stifling competition. Even when alternatives exist, there is little competition and prices do not go down. In fact, the opposite occurs – prices increase and in tandem with one another,” Linthicum said. “HB 4005 will finally shed some light on drug pricing so we can begin to figure out why.”

Nosse said House Bill 4005 will not be a carbon-copy of the California law -- the 2018 Oregon bill smooths out some oddball math that triggers oversight and it retains a unique feature of his 2017 legislation, requiring drug manufacturers to list the prices they charge for high-cost drugs in other first-world countries.

Although some of that information can be gathered elsewhere, collecting it in one spot may provide the most damning assessment of pharmaceutical companies -- their ability to charge American customers several times more than they do in Japan, Europe and Canada.

Public awareness of price-gouging appears to be shaming drugmakers into some constraint in pricing. A new drug for multiple sclerosis is priced at $65,000 -- less than the industry average of $78,000, but still exponentially higher than the $10,000 price typical of MS drugs in the 1990s.

Nosse said HB 4005 will just be a first step -- peeling back the veneer and putting focus on why drugmakers charge what they do.

Jesse O’Brien, the health policy advocate for OSPIRG, is supportive of Nosse’s new bill, but he also sees its limits: “It’s not by any means a silver bullet. I’m under no illusions that transparency is going to prevent price increases for drugs,” he said. “But if they had to explain big price increases, it’d be a deterrent.”

The drug manufacturers have argued that a complicated system of rebates they give to Medicaid and private health insurers masks the true costs of drugs and that the list prices published in the media are not what insurers are actually paying.

An analysis by ProPublica and the New York Times showed that some consumers actually paid less for certain generic medications if they paid cash with the help of mobile apps like GoodRx than they did if they used their insurance, leading to speculation that insurers and pharmacy benefit managers have been padding drug costs and pushing up prices for consumers.

While HB 4005 could provide interesting information to policymakers, actuaries and health insurers, even its supporters say it will not provide usable information for consumers shopping for medications.

“It’s not a shopping bill,” Nosse said. “For many drugs, most don’t have a secondary choice.”

Reach Chris Gray at [email protected].

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