Investor Presentaiton
Audit Results
Prescription drug prices have become a major concern across the U.S. In 2021, Oregon spent
approximately $767 million a year on retail prescriptions for Oregon Health Plan CCOs. While there have
been state and federal efforts to control drug prices, these efforts have primarily focused on drug
manufacturers while PBM risks, including a lack of transparency, have largely been overlooked. Other
states have passed meaningful legislation requiring more accountability from PBMs that have brought
more transparency to the prescription drug supply chain. To date, there has been some PBM reform
legislation proposed in Oregon, but more should be done.
This audit identified areas of concern including the current structure of Medicaid PBMs in Oregon and
OHA's monitoring controls over CCOs and their contracted PBMs. The current structure lacks
transparency and is overly complex as a result, it is difficult to determine the value provided to the
program and to people in Oregon. Transparency and accountability are obscured by nondisclosure
agreements and proprietary information. The current system does not support local community
pharmacies, which are a critical component of health care for all people in Oregon, not just those
receiving Medicaid benefits.
Oregon's Legislature should follow leading practices in other states and create a universal preferred
drug list for Medicaid, require PBMS to act as fiduciaries, prioritize fair pharmacy reimbursements,
require PBMs to disclose cost information, and adopt a new PBM structure in Medicaid.
We also found PBM provisions in the CCO contracts have been strengthened, but OHA's monitoring
controls are not sufficient to determine compliance and do not cover high-risk areas. Oregon has an
opportunity to regulate PBMs to increase the value they provide to the Medicaid program by adopting
leading practices to improve pharmacy access, improve transparency in the prescription drug process,
and potentially save taxpayer dollars.
Oregon's Medicaid program cannot assess the public benefit of
hundreds of millions paid to pharmacy benefit managers
Regulation of PBMs in Oregon is limited and fragmented. DCBS monitors PBMS operating in the
commercial insurance space but not in Medicaid. Medicaid PBMs are subcontractors of CCOS, and OHA
does not have direct supervision over them. Statutory changes are needed in order to provide the
state with direct oversight of all PBMs.
Other states have passed laws increasing protections for patients and community pharmacies related
to PBMs. Some of these protections include uniform preferred drug lists, fair pharmacy
reimbursements, increased transparency, and changes to state Medicaid PBM models. We recommend
Oregon's Legislature consider addressing all of these factors, to the benefit of the many Oregonians
who rely on prescription medications.
Oregon has been slow to address PBM reforms, falling behind many other states that
have passed significant PBM legislation
Policymakers across the country are taking different approaches in tackling rising prescription drug
costs. Other states have focused efforts on PBM reforms, while Oregon continues to focus primarily on
Oregon Secretary of State Report 2023-25 | August 2023 | page 14View entire presentation