Drug Price Transparency Clears Second Hurdle

Backers of HB 4005 were able to fight off excessive delays to a bill that would require pharmaceuticals to explain price hikes of over 10 percent per year.

The drug transparency bill passed out of a key budget subcommittee with just minor changes on a 6-2 vote Tuesday, setting up a vote in the Joint Committee on Ways & Means as early as this week.

The underlying bill requires pharmaceutical manufacturers to detail their cost calculations when price hikes surge above 10 percent a year. The drug makers would pay fees to cover the cost of the oversight program, collectively totaling up to $425,000 a year.

The committee amended the bill to delay the date when drug manufacturers must begin to report to the Oregon Department of Consumer & Business Services from March 15 to July 1, 2019, and added yet another task force to look further at the problem of pharmaceutical drug pricing and transparency.

Sen. Elizabeth Steiner Hayward, D-Beaverton, indicated that the delay was intended to allow time for the Legislature to debate any new recommendations the task force might make in the 2019 legislative session, which ends near the new reporting time.

Oregonians for Affordable Drug Prices opposed an earlier amendment from Steiner Hayward that would have delayed the implementation longer than three months. Spokeswoman Patty Wentz called it critical that the law take effect before 2020. “The problem is now. We can’t wait until 2021 or 2022,” Wentz said.

The new task force is expected to have a quicker turnaround time than the one Rep. Rob Nosse, D-Portland, labored on throughout 2016, and new recommendations would need to be delivered by Nov. 1, 2018.

Two Republicans on the budget subcommittee -- Rep. Mike Nearman of Dallas and Sen. Bill Hansell of Pendleton -- wished to strip the bill of everything but the task force, but Democrats and chief sponsor Rep. Ron Noble, R-McMinnville, held firm on keeping the base bill roughly intact.

“I believe in the underlying bill,” said Noble. “This does not set up an expectation of price controls in future legislation. It’s a transparency issue only.”

Nosse had introduced price controls in the 2017 session, but the measure died after passing out of the House Health Committee on a party-line vote. The Portland Democrat achieved bipartisan support for HB 4005 by focusing on just the transparency portion of his earlier bill.

“Costs are rapidly exceeding our ability to pay,” said Sen. Dennis Linthicum, R-Klamath Falls, another co-sponsor, who compared pharmaceutical price increases to the 1950s sci-fi cult classic “The Blob.”

Linthicum said he was unsure if there was price gouging but the bill could provide information to use in a determination.

The Pharmaceutical Research and Manufacturers Association continued to attack the bill, claiming it would push up costs while not providing consumers with any useful information about what drugs will cost them.

“While H.B. 4005 promises to provide ‘transparency’ for patients, it fails to deliver real answers or cost savings for Oregon’s patients and families. The price patients pay for their medicines at the pharmacy counter is determined not by manufacturers, but by middlemen in the supply chain, including insurers, pharmacy benefit managers (PBMs) and others,” said PhRMA spokeswoman Caitlin Carroll.

Greater transparency about drug formularies, rebates to health insurers and the byzantine workings of the drug-purchasing middlemen known as PBMs could be gist for conversations in the new work group, but Cambia Health Solutions lobbyist Vince Porter said health insurers like Regence BlueCross BlueShield not only do provide information about drug costs to the state, they have to justify their spending to receive rate increases.

“We support continued conversation,” Porter said. “This is the first product and the first step.”

Reach Chris Gray at [email protected].

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