By Rob Nosse
Last month in this column I talked about important bills we passed during the legislative session. This month I’m going to talk about a bill that didn’t pass. Let’s call it “How A Bill Doesn’t Become a Law.”
During the 2023 session, I tried to help pass Representative Nancy Nathanson’s House Bill 3013. Unfortunately, we were unsuccessful. It required pharmacy benefit managers (PBMs) to be licensed with the Oregon Department of Consumer and Business Services (DCBS) so we could regulate their business practices better. It also mandated better reimbursement for pharmacists.
You might be surprised to learn that pharmacies can lose money when they fill your prescriptions. Admittedly this is a bit of a “nerd” topic in the healthcare policy space, but it is one that the media, the Oregon Secretary of State Audits Division and other policy makers are starting to focus on, including our own US Senator Ron Wyden.
Here is a little background. Starting in the 1960s, PBMs were formed to assist employers and insurers in choosing and buying medications. Think of PBMs as a middleman between drug manufacturers, your local pharmacy and insurance companies. As spending on prescription drugs grew, so did the PBM industry. PBMs also set the terms of payment for local pharmacies that buy and dispense prescriptions to all of us.
PBMs are paid with a mix of fees and rebates or coupons drug manufacturers provide to help keep drug prices down. Since they help purchase large numbers of prescriptions, PBMs can negotiate discounts from drug manufacturers often in the form of rebates or coupons that can mitigate the rising costs of prescription drugs. However, the discounts they obtain in their negotiations with drug manufacturers are often not publicly disclosed or explained. Nor are the fees that they charge pharmacies. This makes it hard to know how much money they are really saving anyone. (I am happy to tell readers that starting in September, thanks to the passage of SB 192, rebate amounts will have to be publicly shared.)
Why does this matter? PBM business practices are making it difficult for pharmacies to be in business. To quote an NPR article from earlier this summer, “…employers, pharmacies, doctors and even patients chafe at PBM practices like ‘spread pricing,’ in which the companies pocket money negotiated…”
Doctors have also testified about PBMs being a roadblock in serving patients by impeding the coverage of necessary drugs. The same NPR article states there, “…are around 70 PBMs in the US through mergers, three of them—CVS Caremark, Optum Rx and Express Scripts—have come to control 80 percent of the prescription drug market, and each brings in tens of billions of dollars in revenue annually…” These quotes illustrate the challenges with PBMs.
My attempt to improve PBM business practices began with my predecessor, State Representative Jules Bailey. Back in 2013, he could not get a prescription filled because his pharmacy—a big chain pharmacy—couldn’t get a fair reimbursement from a PBM for the drug it needed to purchase to fill his prescription. That is how our state started regulating the business practices of PBMs. He built a bipartisan consensus understanding of PBMs for future regulation. I’ve sought, with some successes and some defeats, to advance, in pretty much every other session, PBM legislation of some kind or another to improve their business practices and hopefully make prescriptions more affordable.
This year I also supported HB 2725, which was sponsored by Representative Christine Goodwin, and has been enrolled into law. It prohibits PBMs from retroactively denying or reducing payments to pharmacies, a major concern among local pharmacies serving patients across Oregon.
Sometimes even a capable legislator isn’t successful at passing a bill. Due to the delay caused by the Senate Republican walkout, the Legislature had to move very quickly in the closing weeks of the session. Lobbyists for PBMs claimed that the bill would have unintended consequences and raise the cost of filling prescriptions for consumers. There wasn’t time to address these concerns and draft another amendment on the last day of the session, so several Senators voted against the bill, and it failed on the Senate floor, something that rarely happens.
I don’t begrudge the Legislators who voted against it. I also don’t want to pass bills that can’t be enforced or contradict other state or federal laws. But I think if we had more time to work on it, concerns about HB 3013 could have been addressed and the bill would have passed.
I won’t give up on ensuring we have more transparency and accountability for these companies given the impact they have on pharmacists and patients. I plan to bring a bill in 2024 to accomplish something similar to HB 3013. As I like to say, “stay tuned.”
