Oregon Enacts Law to Demand Transparency in Drug Pricing

Earlier this week, Oregon Governor Kate Brown, D, signed a bill that looks to provide more transparency around drug pricing.

House Bill 4005 requires drug manufacturers to compile a report on a prescription drug if the price was $100 or more for a 1-month supply (or course of treatment lasting less than 1 month) and if the net price increased by 10% or more.

For drugs that fit into these criteria, manufacturers would need to provide information to explain the factors that contributed to the price increase, such as:

• Research and development costs
• Direct costs incurred to the manufacturer, marketer, and distributor of the drug
• The 10 highest prices paid for the drug in the previous calendar year in any country outside of the United States

Under the law, pharmaceutical companies must provide these reports by July 2019.

In addition, the bill creates a drug pricing task force and mandates that Oregon’s Department of Consumer and Business Services post a list of high drug price increases. Furthermore, the bill also requires that insurers show how these drug prices affect premiums.

“Every Oregonian should be able to access the medications and treatments that allow them to live healthy, productive lives. This bill brings greater transparency around drug pricing, an important step towards making life-saving and essential drugs more affordable,” said Governor Brown in a statement.

As soon as the bill was signed, the pharmaceutical industry responded.

“[The law] will have a chilling effect on an innovative industry and do nothing to empower patients or lower their prescription drug costs,” said Biotechnology Innovation Organization’s CEO, Jim Greenwood, in a statement.

According to the National Academy for State Health Policy, state legislatures are currently considering 78 bills to regulate pharmacy benefit managers (PBMs), 48 that focus on drug pricing transparency, 11 that address so-called "price-gouging" and more on a variety of other topics, including the importation of drugs.

The proposed bills have received pushback from the industry, with pharmaceutical companies sending lobbyists to state governments around the country, according to Kaiser Health News.

Other states, including Louisiana, Nevada, Maryland, North Carolina, and Vermont have also passed measures that aim to increase transparency in drug pricing.