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Oregon House passes pharmacy benefit manager bills

The bills had strong bipartisan backing after pharmacies pleaded for help. One sparked cost concerns from Oregon cities.
Oregon House of Representatives in Salem. | JAKE THOMAS/THE LUND REPORT
June 15, 2023

As Oregon lawmakers end the weeks-long standoff in the Senate, the Oregon House has overwhelmingly passed a pair of bills tightening regulations on companies that act as drug supply middlemen. 

The Oregon House on Wednesday voted unanimously for House Bill 2725 and 53-4 in favor of House Bill 3013. The bills are intended to stop pharmacy benefit managers from retroactively reducing or denying fees to pharmacies while also beefing up state oversight. 

Pharmacy benefit managers are companies that negotiate drug prices between manufacturers, insurers and pharmacies. For a decade critics have accused them of driving up drug prices and pushing pharmacies out of business. Pharmacy benefit managers say they’ve kept costs down and have offered to work with local pharmacies as Oregon lawmakers considered the bills

State Rep. Christine Goodwin, a Canyonville Republican who cosponsored both bills, told The Lund Report that legislation’s strong bipartisan support reflects growing concern over how pharmacy benefit managers are affecting local pharmacies. 

“It really is up to them to make good on their word and have good faith agreements with pharmacies,” she said. 

H.B. 2725 restricts pharmacy benefits managers’ ability to “claw back” payments they’ve made to pharmacies after completing a sale. 

H.B. 3013 requires pharmacy benefit managers to be licensed by the Oregon Department of Consumer and Business Services. The House approved it despite a last-ditch push from the League of Oregon Cities to highlight increased costs the group says will be felt by consumers, including the cities group, self-insured entities, and consumers.

The Lund Report has shown that Oregon’s previous regulations of pharmacy benefit managers has resulted in no penalties. The bill would establish a full-time pharmacy benefit manager regulator and expand the department’s authority. 

Scott Winkels, lobbyist with the League of Oregon Cities, has warned that H.B. 3013 will have unintended consequences. While the bill was tagged with a fiscal price tag of “indeterminate,” Winkels said in an email to The Lund Report the league is concerned that the bill requires plans to pay hefty additional dispensing fees that will go to pharmacies. He said it will mean a $2.8 million prescription drug cost for the insurance plan local governments in Oregon use. 

“We understand legislative frustration with PBMs and the desire to assist independent pharmacies, however, the bill (have) adverse impacts on public employers, employees and their retirees and needs additional consideration,” he wrote. “We ask this bill not move forward this session and (a) legislative workgroup be formed to make recommendations in 2024.”

Goodwin responded that the bill won’t automatically increase dispensing fees and that pharmacy benefit managers can work with local governments to prevent costs from being passed on to patients. 

The Oregon State Pharmacy Association has warned of dire consequences for local pharmacies in Oregon if the bills don’t pass because a Republican-led walkout of the Senate has stalled legislative business. As hundreds of bills risk languishing,  lawmakers are trying to reach a deal to address Republican objections to legislation on abortion, transgender care. 

Both of the pharmacy benefit manager bills are scheduled for a reading in the Senate Thursday. 

You can reach Jake Thomas at [email protected] or via Twitter @jakethomas2009.