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Investor Presentaiton

Pricing of Prescription Drugs. The task force was directed to create a strategy for understanding the pieces of the pharmaceutical supply chain and make recommendations to the Legislature to bring more transparency. The task force made 15 recommendations, one of which focused on PBMs. 13 As of the time of this report, only one of the recommendations has been fully implemented, one is partial, and 13 have not been implemented, which includes the PBM-focused recommendation. After the recommendations were made, the task force was disbanded, and the Prescription Drug Price Transparency Program took over at DCBS. The program compiles specific cost and price information from manufacturers and health insurers and issues yearly reports on their findings. 14 However, most efforts are focused on drug manufacturers. Oregon is one of a handful of states in the country with a Prescription Drug Affordability Board. The board was established in 2021 to protect stakeholders within Oregon's health care system from the high costs of prescription drugs. The board studies the prescription drug distribution and payment system in Oregon and looks at policies adopted in other states and countries with the goal of lowering the list price of prescription drugs for people in Oregon. The board releases two yearly reports detailing its findings and recommendations. 15 One report is targeted to OHA and the Legislature, and the other is an informational report on the generic drug marketplace. Examples of PBM complaints DCBS can investigate • Maximum allowable cost violations Pharmacy auditing violations Fraud Patient steering DCBS is the regulator of the insurance industry in Oregon and is charged with registering PBMs. Starting in 2013, PBMs must be registered to conduct business in the state and renew annually. While DCBS can also investigate complaints lodged against PBMs for several reasons, staff noted complaints in the last few years have been minimal and there have not been any significant investigations aimed at PBM misconduct to date. DCBS reported receiving 123 PBM complaints from 2015 - 2022 and three so far in 2023. Most of these complaints were closed with no action determined to be needed, according to DCBS's interpretation of Oregon or federal statutes. Pharmacists we spoke to say the complaint process is onerous and ineffective; they have stopped lodging complaints unless they are particularly egregious. Anti-gag clause violations Current statutes define PBMS as organizations contracting with pharmacies on behalf of an insurer offering a health benefit plan, a third-party administrator, or the Oregon Prescription Drug Program. 16 DCBS does not consider Medicaid PBMs to fall under the current definition; therefore, they are not subject to most statutory requirements and go unregulated by DCBS. The Legislature should add Medicaid PBMs to the definition in ORS 735.530. 13 Task Force on Fair Pricing of Prescription Drugs report 14 DCBS Prescription Drug Price Transparency reports 15 DCBS Prescription Drug Affordability Board Reports 16 ORS 735.530 Oregon Secretary of State Report 2023-25 | August 2023 | page 12
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