Investor Presentaiton

STATE OF 1859 OREGO OFFICE OF THE DIRECTOR Tina Kotek, Governor Health Authority 500 Summer St. NE E-20 Salem, OR 97301 Voice: 503-947-2340 Fax: 503-947-2341 www.oregon.gov/oha August 16, 2023 Kip Memmott, Director Secretary of State, Audits Division 255 Capitol St. NE, Suite 180 Salem, OR 97310 Dear Mr. Memmott: This letter provides a written response to the Audits Division's final draft audit report titled Patients and Independent Pharmacies are Harmed by Poor Accountability and Transparency from Medicaid Pharmacy Benefit Managers (PBMs). The Oregon Health Authority (OHA) appreciates the role of the Secretary of State Audits Division in providing oversight of Oregon's State-funded programs on behalf of taxpayers and the people we serve. The scope of this audit was limited to retail or community pharmacy claims from January 2021 to December 2021 and aggregated rebate and payment information from PBMs and CCOs from January 2017 through December 2021. The audit did not look at prescription drugs given in a hospital setting or administered by a practitioner. The objective was stated to be: 1. Assess the value PBMs provide the Medicaid program and identify opportunities for improvement. 2. Determine whether OHA's contract monitoring practices with CCOS and their PBMS are adequate. Identify and report on potential conflicts of interest existing within the current CCO and PBM structure. The SOS office made two recommendations to OHA and outlined several recommendations to the legislature. First, OHA would like to offer comments on the recommendations made to the legislature. The audit's focus is on PBMs' role in the CCOS' delivery of pharmacy benefits for Medicaid recipients statewide. However, there are recommendations that have broad applicability when considering PBM regulation generally. This is particularly true for recommendations #6 ("Including PBMs that serve Medical Assistance programs directly or indirectly in OAR 735.530") and #8 ("Require annual reporting of PBMs and CCOs to DCBS"). OHA agrees that PBMs serving CCOS should abide by the same set of rules governing them in the commercial entities that they serve. OHA also agrees that reporting requirements to DCBS should be aligned across all lines of business conducted by PBMs. This can be a tool to improve the visibility of regulators and improve state agency responsiveness in terms of monitoring and regulating PBMs practices. Recommendation #4 proposes there be a uniform preferred drug list (PDL) and prior authorization (PA) criteria for Medicaid. It seems that the SOS Audit team feels that change is due in this area to address inequities and ensure a truly portable

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