Investor Presentaiton
Audit Highlights
Oregon Health Authority, Pharmacy Benefit Managers
Poor Accountability and Transparency Harm Medicaid Patients and
Independent Pharmacies
Billions of dollars are spent on Medicaid. It is important the state take steps to ensure the program is run
efficiently and effectively to better serve people in Oregon. The current structure lacks transparency and is too
complex to efficiently measure value. The State should change the current model and enact legislation that
focuses on patient protections, pharmacy protections, and increasing transparency in the prescription drug supply
chain. Making these changes will help ensure the Medicaid program is getting good value for pharmacy benefits,
people have access to the same medications, and Oregonians have access to community pharmacies.
Why this audit is important
Prescription drugs reduce the need
for medical services and improve and
extend life. While efforts to lower
drug prices have targeted
manufacturers, there is growing
interest in reviewing the influence of
pharmacy benefit managers (PBMs).
The largest PBMs in the U.S. control
80% of the market share and are
vertically integrated with the largest
health insurance companies and
pharmacies. Vertical integration
poses risks to drug affordability and
decreases access to medications.
CCO patients do not have access to
the same medications under the
current model. Moving to another
CCO could result in patients needing
to go through the burdensome prior
authorization process.
Adopting leading practices will
improve pharmacy access, improve
transparency in the prescription drug
process, and potentially save
taxpayer dollars.
What we recommend
What we found
1. The current structure of Medicaid PBMS is too complex for the State
of Oregon to efficiently measure value. The prescription drug process
in Medicaid involves multiple entities including sixteen CCOS
(Coordinated Care Organizations), six PBMs, hundreds of pharmacies,
multiple drug manufacturers, wholesalers, pharmacy administrative
organizations, OHA, and the Department of Consumer and Business
Services, among others. (pg. 6)
2. Oregon's regulation of PBMs is limited and fragmented. Other states
have meaningful legislation targeted at patient protections,
pharmacy protections, and transparency. PBM reforms are bipartisan
policy efforts to limit unfair practices, which can hurt community
pharmacies and limit access for people. Other states are also
adopting different PBM models for Medicaid, making it easier for
governments to provide effective oversight. (pg. 14)
3. Pharmacy reimbursements vary significantly depending on the drugs,
pharmacy type, and PBM. Pharmacies often lose money when filling
certain prescriptions. We found that national chains, some of which
are owned by PBMS or PBM parent companies, were reimbursed
twice the amount independent pharmacies were for selected drugs.
(pg. 20)
4. OHA does not ensure sufficient transparency and compliance from
PBMs. While OHA has improved CCO contract language, more needs
to be done to ensure high-risk areas are monitored appropriately and
contract provisions are comprehensive. (pg. 28)
We made 2 recommendations to OHA and 7 to the Legislature. OHA agreed with all of our recommendations. The
response can be found at the end of the report.
OREGON OREGON
AUDITS
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