Oregon’s HB 4005 fails to deliver savings for patients

Medicine costs are growing at the slowest rate in years, but it doesn’t feel that way to patients who are facing higher out-of-pocket costs for their health care across the board. Proposals like Oregon’s HB 4005, which targets R&D spending and creates new bureaucratic reporting requirements, won’t help patients because they don’t address the real reason people are paying more for their medicine out-of-pocket at the pharmacy counter.

HB 4005 promises to provide “transparency” for patients, but fails to deliver real answers or cost savings. That’s because what patients pay for an individual drug is determined by middlemen in our system, including pharmacy benefit managers (PBMs) and insurers, not the drug’s manufacturer. Through robust, competitive negotiations, middlemen receive rebates that can save 30-50% off a drug’s list price. In fact, these negotiations have been so successful in recent years that rebates doubled between 2013-2015.

Too often, however, insurers aren’t passing these savings on to patients. Half of all patient spending for brand prescription medicines is based off a drug’s list price instead of the lower, negotiated rate. At the same time, insurers are using mechanisms like high-deductibles or coinsurance to shift the cost burden onto patients. Today, half of all plans require patients to meet a deductible for their prescription medicines. That means patients are frequently paying more for their medicine than their insurer. When patients can’t afford to meet high out-of-pocket costs, they are twice as likely to abandon their medicine at the pharmacy counter.

Instead of targeting research and development, which threatens to stifle life-saving innovations, we should address the real challenges patients face at the pharmacy counter. Unfortunately, HB 4005 doesn’t deliver the answers Oregonians need.

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