When reviewing Oregon’s actions on health care this past year, it’s easy to think that ever-rising medication costs were a priority for lawmakers. In reality, the state continues to leave critical options on the table — and Oregonians unable to afford urgently-needed prescription drugs.
Across the state, patients’ bank accounts continue to be collateral in the health care industry’s race to wealth. A 2022 report identified that prescription drug prices contributed to Oregon’s 49% increase in healthcare costs over a six-year period, surpassing the national average.
One of the main causes of surging costs comes from a powerful but obscure sector of the pharmaceutical supply chain known as pharmacy benefit managers (PBMs). These middlemen control about 80% of the U.S. prescription drug market and negotiate drug prices for health plans, employers and Medicaid programs like Oregon Health Plan. Their largely unregulated practices allow them to pocket manufacturer rebates intended to help patients reduce costs — making PBMs extremely profitable.
Given the scale of their impact, it’s reasonable to think that PBMs would be a top focus in reducing health care costs. The Oregon Secretary of State recently released a report detailing how Oregon’s current regulations aren’t sufficient to protect patients from PBMs. But just this year, lawmakers missed an opportunity to increase oversight and transparency in PBMs’ activities.
In the most recent legislative session, lawmakers established the Prescription Drug Affordability Board (PDAB). The board is tasked with evaluating the cost of prescription drugs, determining whether they pose an affordability challenge, and making recommendations to the Legislature. However, lawmakers didn’t include PBM oversight in PDAB’s mission. Scrutinizing prescription costs alone isn’t enough.
For example, the cost of hepatitis C treatment for new patients might initially seem quite high, reaching several thousand dollars. However, over time, this life-saving treatment pays for itself by reducing overall patient medical expenses, such as emergency room trips and additional care. PBMs, who control which drugs are covered by insurance and Medicaid, have the power to determine whether hepatitis C patients can access medication — potentially forcing patients to forgo medication if it isn’t covered. And if it is covered, PBMs continue to pocket rebates on the treatment intended to reduce patient costs. Narrowly focusing on price won’t reduce Oregonians’ health care prices long-term.
PBMs’ continued influence in drug pricing reduces patients’ access to lifesaving medication. To achieve health care affordability for all Oregonians, lawmakers must address the role of PBMs both locally and nationally by expanding regulation and requiring transparency in their operations. Oregon Representative Chavez-DeRemer has co-sponsored a federal bill aimed at reducing the impact of PBMs, which is a great first step. In the next session, state lawmakers must also work to combat the influence of PBMs to protect Oregon patients.
