Nosse Prescription Drug Price-Setting Bill Survives Filing Deadline

A more thorough fiscal analysis of HB 2387 will be conducted in the Committee on Ways & Means. The amended version sets up an account for drug manufactures to issue rebates for excessively priced drugs, which will be used to repay health insurers.

A bill regulating the price of medications in Oregon passed out of the House Health Committee by its filing deadline Monday, ensuring that the groundbreaking legislation will live to see another day.

House Bill 2387 received some last-minute amendments from Rep. Rob Nosse, D-Portland, its sponsor, before the committee voted 5-4, on party lines, to send it to the budget committee.

“I tried really hard to listen to the critics,” Nosse said.

HB 2387 would set up a program that caps out-of-pocket costs for consumers, while also setting price caps for what pharmaceutical manufacturers can charge insurers, based on prices set in other industrialized countries.

Under the revised bill, new drugs could be on the market for two years without price regulations, and a cap on their prices would be triggered at $12,000, up from $10,000. Drug companies would now also send rebates for overpriced drugs into an account administered by the Department of Consumer & Business Services. Health insurers would then apply for the rebates on behalf of their consumers.

“That should really help to make sure it’s not a windfall to carriers,” Nosse told The Lund Report.

Price caps would be triggered if a drug price increased more than 3.4 percent a year or if it cost more than $12,000 a year per patient. If a drug company exceeded those limits, the Department of Consumer & Business Services would set a price based on the highest costs in other developed countries, and would require drug companies to rebate the excess price.

Consumers would see their out-of-pocket costs limited to $100 per drug treatment for most health plans and $200 for high-deductible bronze plans.

The bill must go to the Committee on Ways & Means, because HB 2387 has an unspecified cost to the Oregon Health Authority and the Department of Consumer & Business Services, but, because it affects prices paid by the Oregon Educators Benefit Board and the Public Employees Benefit Board health plans, it would likely save the state money.

Pharmaceutical companies are fighting the bill, arguing that it could hurt the local bioscience industry and limit the ability of consumers to get medications.

“PhRMA remains deeply concerned that insurers will be the primary group that benefits from this bill, and patients, in turn, will be seriously harmed,” wrote Jim Gardner, a lobbyist for the Pharmaceutical Research & Manufacturers of America, a trade industry group.

Gardner specifically called out a section that was struck from HB 2387 in the amendments that would have required health insurers to be more transparent about changes to their drug formularies -- but the protections removed from this section are covered by a separate bill, Senate Bill 272, which is still alive in the Senate Rules Committee.

Sen. Elizabeth Steiner Hayward, D-Beaverton, supported passing the bill from the Senate Health Committee to the Rules Committee to allow Regence BlueCross BlueShield and the American Cancer Society more time to reach an agreement on the statutory language.

The Republicans on the Health Committee all said they appreciated Nosse’s effort on HB 2387, but opposed it nonetheless. Rep. Cedric Hayden, R-Cottage Grove, said earlier he would support a bill that capped cost increases for generic medications -- those so-called “orphan drugs” that have seen their prices go up 100 to 1000 percent after investment groups buy the rights to these drugs.

But Rep. Mitch Greenlick, D-Portland, said that, while a generic drug price cap would protect consumers from the most egregious actors, it would do little to bring down the overall surge in the cost of drugs, which is driven by the blockbuster drugs that cost more than $12,000 for a treatment, and are often priced two to three times higher in the United States than Canada or European countries.

Reach Chris Gray at chris@thelundreport.org.

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