Under a law crafted by the Legislature , the Oregon Prescription Drug Affordability Board is developing a plan for setting 鈥渦pper payment limits鈥� on how much government and commercial health plans could pay for prescription drugs the board deems too costly.
The plan is due in September. And if Oregon lawmakers then grant the board the authority to set price caps, it would put the state near the forefront of state-led efforts to contain skyrocketing drug costs.
Spending on pharmaceutical drugs rose more than on any other type of health care between 2013 and 2019, according to released in July 2022. Commercial insurers鈥� per-person spending on pharmaceutical drugs nearly doubled to over $1,000 a year in that time period.
scheduled for April and May could generate support for the caps. But as they draw closer, the board鈥檚 efforts have been under assault:
- PhRMA, a national pharmaceutical manufacturer trade group, has been aggressively criticizing Oregon鈥檚 board as ill-suited to take on the complex issue of drug prices, including in a letter last month.
- Last month, the industry group persuaded U.S. District Court Judge Michael Mosman to block the state from requiring manufacturers to submit reports to the state explaining their drug price increases.
- Meanwhile, to support criticisms of the Oregon board, industry lobbyists are pointing to similar criticisms leveled by allied patient groups who often receive funding from the industry.
Reid Porter, senior public affairs director for national pharmaceutical manufacturer trade group PhRMA, is blunt that his organization is questioning whether the state board is up to the job it鈥檚 taken on.
鈥淔rankly, there seems to be political points that were scored by establishing the board,鈥漢e told The Lund Report, while adding that such boards 鈥渁re set up to fail from the start.鈥�
Asked for an interview with board executive director Ralph Magrish to discuss the situation, a state spokesperson declined. But in an interview with state auditors in late 2022, Magrish blamed the lack of progress in curbing drug prices on lobbying by drugmakers as well as insurers.
鈥淧harma lobbyists have an endless and infinite bench of resources and that can be difficult to go up against,鈥� he said, according to notes from the interview.
To state Sen. Deb Patterson, D-Salem, said the industry has aggressively opposed the board ever since she spearheaded a bill creating it in 2021. She said the board鈥檚 work seeks to tackle an important issue.
鈥淭he bottom line Oregonians need to have information on what it costs to purchase prescription drugs and they need help to be able to afford 鈥� life-saving medications,鈥� she told The Lund Report
National battle over boards
At least nine states engage in drug affordability reviews, most of them using boards. Other states are also considering setting up similar boards. Drugmakers are fighing them around the country, including.
During a media call last week, Megan O鈥橰eilly, a national AARP vice president for government affairs, called the boards 鈥渁nother tool in our toolbox to lower prescription drug prices at the state level.鈥� She said that the boards analyze high-cost drugs and recommend ways to lower spending on them.
Five states have given their boards the ability to set prices for some drugs, with Colorado and Maryland in the lead.
Last month, Colorado鈥檚 board voted to declare rheumatoid arthritis drug, Enbrel, unaffordable, becoming the first state to begin setting a price cap for a prescription medication.
鈥淲e all know prescription drug prices have been too high for too long and too many Americans struggle to afford the life-saving medication they need,鈥� Sara Schueneman, state director AARP Colorado, said. 鈥淚n short, lives are at stake.鈥�
The that on average Enbrel cost over $46,000 for a person to take it for a year in 2022, with an out-of-pocket cost of $2,295. However, Schueneman noted that the board鈥檚 vote to initiate a price cap on the drug drew a legislative effort to undo it. In a Securities Exchange Commission Amgen, the maker of Enbrel, cites Colorado鈥檚 efforts as having the potential to 鈥渘egatively affect鈥� product sales.
Oregon efforts spark resistance
The state boards鈥� role essentially makes them referees in an ongoing tug-of-war between drugmakers seeking to maximize profit by steering patients to higher-cost patented drugs, and health insurers who try to push patients toward generics while limiting overall drug spending.
The Oregon Coalition for Affordable Prescriptions, a consortium that includes insurers and labor unions, backed the legislation creating Oregon鈥檚 board.
鈥淲e firmly believe that every Oregonian should have access to the medications they need without undue financial burden,鈥� coalition president John Mullin wrote to the board last year. 鈥淭he creation of the PDAB is a significant step in the right direction, and we commend the board for its ongoing efforts to fulfill its statutory mandate.鈥�
But Porter, the drugmaker representative, said the board鈥檚 focus leaves out the role of pharmacy benefit managers, companies that represent insurers, manage their drug coverage and negotiate drug prices. Critics at the federal and state levels accuse them of strong-arm tactics that have harmed patients and retail pharmacies. Porter pointed to an Oregon Secretary of Statethat called for state officials to increase oversight of them.
The legislation that set up in 2021 initially required it to set price caps, though industry lobbying led to a softer version. It consists of seven members and a small staff.
Oregon lawmakers in 2023 that tasked the board with designing a program that could similarly cap the cost of prescription drugs. At the time, Patterson .
Currently, the board鈥檚 central tasks include providing reviews on nine prescription drugs and at least one insulin product that Oregonians may have trouble affording. It also provides recommendations to the Legislature. Last session, lawmakers signed off on : capping the out-of-pocket cost of insulin to $35 and increasing regulation of pharmacy benefit managers, drug supply middlemen.
PhRMA has submitted multiple letters to the board sharply criticizing its processes since it began meeting in 2022. In its most recent one, State Policy Director Dharia McGrew and Assistant General Counsel Merlin Brittenham asserted that the board has not been following its own law and regulations, including failing to consider health equity as well as the effect of discounts and rebates on drug affordability.
There are 鈥渟erious questions about the validity of the Board鈥檚 affordability review process,鈥� they wrote.
While the board allows for public testimony, the PhRMA executives wrote that it needed to do more to proactively seek out input for patients and caregivers who rely on a drug under an affordability review.
Patient groups join industry in criticism
Patient groups, which significant funding from drugmakers and oftenin advocating on issues, have also submittedto the board. Nathaniel Brown, director of advocacy for the Portland-based Chronic Disease Coalition, wrote that the board uses drug manufacturer prices as a starting point, 鈥渂ut any given drug鈥檚 list price usually doesn鈥檛 align with patient costs.鈥�
Lorren Sandt, executive director of Oregon City-based patient advocacy group Caring Ambassadors Program, Inc. told The Lund Report that the board doesn鈥檛 give patients enough time to comment during its meetings. She said the board should have an advisory committee to get specific feedback from patients.
Sandt, who criticizing the board, also questioned the affordability review process. She said that some drugs may cost more but will save the health care system money if patients who use them are healthier. Placing price caps on drugs could cause manufacturers to raise costs of other medications, she said.
鈥淣obody鈥檚 done this yet,鈥� she said. 鈥淎nd that鈥檚 part of the issue.鈥�
When asked about her relationship with PhRMA, she said she speaks with its representatives and receives a 鈥渟mall grant鈥� from them each year.
Suit knocks out data requirements
Before Oregon set up its board, the state鈥檚 2018 Prescription Drug Price Transparency program required drug manufacturers to disclose to the Department of Consumer and Business Services data on price increases. The program h to comply with its requirements.
PhRMA in 2019 alleging the program was unconstitutional and made manufacturers fork over trade secrets.
Earlier this month, U.S. District Judge Michael Mosman issued hat mostly sided with PhRMA. The ruling left intact drug manufacturer reporting requirements for drugs covered by patient assistance programs that see a 10% increase from the previous year.
However, drug makers won鈥檛 have to report 鈥減ercent price increase, reasons for the price increase, research and development costs supported by public funds, direct costs related to manufacturing, marketing, distribution, and ongoing research, sales revenue, profit, and prices paid in other countries for the drug鈥� and 鈥渢here will be fewer eligible drugs that may be subject to affordability reviews,鈥� according to a state spokesperson.
Jonathan Bartholomew, AARP director of government affairs, said his group was still analyzing the effects of the ruling.
But he said that Oregon鈥檚 board will still have 鈥減lenty of information鈥� to do its work, including claims databases and other sources. While the board doesn鈥檛 have the ability to set price caps they could recommend bulk purchasing of costly drugs or push for higher rebates from manufacturers.
The state plans to appeal the ruling.
This story was originally published by The Lund Report, an independent nonprofit health news organization based in Oregon. You can reach Jake Thomas at jake@thelundreport.org or via .