In The News | Guest column: Price caps on medications will disrupt Oregon health care

Oregon Bend Bulletin

Author: Monique Whitney, PUTT Executive Director

The 85 community and independent pharmacies in Oregon are on the front lines for residents, acting as a primary resource for many to get their medications. In 2023 alone, these pharmacies filled more than five million prescriptions. But for many Oregonians, community and independent pharmacies are more than just places to get medications.

Local pharmacists are trusted health care partners who know patients by name, understand their medical histories, and provide personalized and trusted care that’s increasingly rare in today’s health care landscape. Anything that threatens our independent pharmacies also threatens our communities – which is exactly why our state legislators should oppose any effort to empower the state’s drug review board to set harmful price caps on certain medications.

Oregon’s independent pharmacies are already under immense pressure. From low reimbursements to the growing influence of industry middlemen known as pharmacy benefit managers (PBMs), independent pharmacies are facing increasing financial challenges. In August 2023, an audit from the Oregon Secretary of State revealed that PBMs reimbursed independent pharmacies less than they did national chain pharmacies. Trending Bend hopes ‘riskier’ spending can spark sluggish core area development Body found near Lava Island Falls identified as missing tourist

PBMs have long been criticized for their anti-competitive practices, such as artificially inflating drug prices, consolidating power by buying up pharmacies and doctors’ offices, and decreasing reimbursement rates for smaller pharmacies. These predatory practices threaten the ability of Oregon independent and locally owned pharmacies to provide essential care and services to vulnerable populations, such as elderly and low-income communities.

Across the U.S., a similar trend is unfolding. Nationally, the three largest PBMs — Express Scripts, CVS Caremark, and Optum Rx — now control around 80% of all prescription drug claims. These “big three” PBMs are vertically integrated with their own health insurers and pharmacy networks, giving them significant power and influence over drug pricing and access.

To combat these practices, members of Congress across both aisles have supported measures to reign in predatory PBM practices. Proposals have addressed the need to ban spread pricing, which allows PBMs to charge health plans more for a drug than they reimburse the pharmacy, bar PBMs from owning pharmacies, and increase transparency around contracts and rebate structures.

Unfortunately, Oregon legislators are likely to consider a policy that would expand the authority of the state’s existing Prescription Drug Affordability Board and give the board the power to set upper payment limits – or UPLs – on certain medications. It’s a proposal that could unintentionally restrict patient access to critical medications, harm Oregon pharmacies that are already struggling, and disrupt the broader health care market.

A UPL sets a cap on how much an insurance company or public payor such as Medicaid can reimburse a pharmacy and other providers for a medication, often without accounting for inflation, market fluctuations, or supply chain costs. If the reimbursement falls below the pharmacy’s purchase price, pharmacies may be forced to dispense certain medications at a loss, making it financially unsustainable to stock essential drugs. In essence, a UPL could lead to drug shortages, delayed access to treatments, and worse patient outcomes for those who can’t adhere to critical medications – unintended consequences of UPLs that policymakers often overlook.

Despite claims of improving affordability, UPLs don’t affect the purchase price of a medicine or reduce what patients pay for a medication at the pharmacy counter. Trending Big crowds, big plans, big challenges for Deschutes County fairgrounds Bend’s underpasses flood again, await drainage fix

A survey of Oregon stakeholders across the health care supply chain showed that more than half of respondents did not believe a UPL would result in cost savings. A number of respondents also raised concerns that implementation of a UPL would result in increased administrative burdens and operational challenges, in addition to negatively impacting patient access and the financial viability of local pharmacies.

The Oregon legislature must prioritize policies that both protect patient access and sustain independent pharmacies... Continue Reading