Oregon lawmakers eye pharmacy benefit manager regulation
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Sarah Grillo/Axios
Some Oregon lawmakers say they plan to propose regulations on pharmacy benefit managers, following the lead of Congress and other states' Legislatures.
Why it matters: Supporters of the regulations say the goal is to ensure the state's dwindling independent pharmacies have a better chance to stay in business.
- Pharmacy benefit managers (PBMs) act as a negotiator between drugmakers, insurers and consumers and manage the drug supply chain and prescription prices.
- The three largest PBMs — CVS Caremark, Express Scripts and OptumRx — dispensed 80% of prescriptions in 2023, according to a Federal Trade Commission report.
What they're saying: "The whole system is very complex and very opaque, which leaves a lot of room for kind of gaming the system for profit," Dan Hartung, a professor at Oregon State University's College of Pharmacy, told Axios.
- "There's concerns from regulators about monopoly," he added, referring to a planned FTC lawsuit based on alleged negotiating tactics aimed to steer patients to use more expensive drugs.
Driving the news: State Rep. Rob Nosse (D-Portland) is hosting a public session Wednesday between chain pharmacies, independent pharmacists, insurers and patient advocates to workshop possible legislation on the business practices of PBMs.
- Oregon's next legislative session starts in January.
The big picture: Oregon is facing a chronic shortage of retail pharmacies, and Nosse says he believes regulation of PBMs is one way to ensure the state's existing pharmacies stay financially viable.
- PBMs play a key role in how pharmacists are compensated, Nosse tells Axios, because they're responsible for managing prescription drug benefits on behalf of insurance plans.
- That means PBMs also are in charge of determining reimbursement rates paid to pharmacists. "If you're an independent pharmacist, you're making your living based on filling prescriptions," he says.
The other side: "A mandated dispensing fee only increases prescription drug costs for Oregon's working families and individuals with disabilities," Phil Blando, a spokesperson for CVS Caremark, told Axios in an email statement.
- Express Scripts, OptumRx and the Pharmaceutical Care Management Association did not immediately respond to requests for comment.
Zoom in: Nosse's working proposal would mandate PBMs to pay "adequate" dispensing fees across the board and prohibit spread pricing.
- Yes, but: This cost could be passed on to consumers, especially those with high-deductible health plans, a challenge that could make it difficult to drum up support, Nosse acknowledges.
The bottom line: Oregon has regulated PBMs in various ways for years, but bipartisan-supported House bills aimed at pharmacist compensation failed on the Senate floor the last two legislative sessions.
- Strong opposition came from the League of Oregon Cities and several large unions with healthcare trust plans, which that argued regulation would increase medication costs for large purchasers.
- Nosse hopes that by bringing stakeholders into the bill-drafting process he can broaden support for it by next year.
Editor's note: This story has been corrected to reflect that CVS Caremark did respond, via email, to a request for comment.