SALEM – Oregon lawmakers in both parties are pushing a plan to require drug makers to publicly justify big price hikes, and officials say they are charging ahead with legislation despite strong opposition from pharmaceutical companies.
If passed, House Bill 4005 would require drug companies to file annual reports with the state outlining price increases of drugs that cost at least $100 per month and why prices were hiked. They'd also have to reveal manufacturer costs, sales revenue, profit and other data.
Price information reports would be posted to a public website and the state would hold a hearing each year to review the reports, according to the bill. Companies could face fines of up to $10,000 per day if they failed to file a report on time or give state regulators "inaccurate or incomplete" information.
The proposal comes after the California Legislature adopted a similar bill last year. Nevada also has a law requiring pricing transparency from suppliers of insulin, a medicine used by diabetics.
Oregon's bill is a watered-down rewrite of legislation Democrats introduced last year, which would have capped prescription co-pays and required drug makers to refund excessive price increases. Those proposals, which were complex and politically unpalatable to some, died without a vote.
But this year's bill has bipartisan support from senators and representatives, who have hailed it as bringing needed transparency to the opaque drug pricing system.
"This is a good first step at figuring out how to bring down prescription drug prices," said Rep. Rob Nosse, a Portland Democrat and the bill's primary author.
Nosse said the bill is meant to help keep the cost of medicine down – not by humiliating drug companies for netting big profits on the backs of the sick, but by getting as much information as possible so better policies can be enacted.
Rep. Rob Nosse, D-Portland, left, and Sen. Dennis Linthicum, R-Klamath Falls.
"I don't think it's about shame," Nosse said in an interview. "It's just about saying, 'If you're going to raise your price so much, why are you doing that? Tell us.'"
Another supporter of the bill is Sen. Dennis Linthicum, a Republican first-termer from Klamath Falls.
At the bill's hearing, Linthicum said he believes government should get out of the way of the health care industry so the free market can work -- within limits.
Linthicum said more transparency is needed because the health care system is murky, making it tough to pin down problems. "I am not keen on exposing any industry to invasive government inquiries, but something is wrong," he testified, calling the prescription drug market "broken."
Linthicum is also a type-1 diabetic. So is his daughter. They've seen the price of insulin skyrocket, he said, making drug pricing transparency all the more personal. "It's important to me," Linthicum said during an interview. "It's important to my family."
Predictably, pharmaceutical companies are fighting the bill tooth and nail. The crux of the industry groups' arguments is that drug pricing transparency won't help consumers and will hamper pharmaceutical researchers.
For example, Eric Lohnes, who works for an industry group called Pharmaceutical Research and Manufacturers of America, testified that the bill would give the public "a narrow and distorted view of medicine prices" and put new burdens on the health care system. He said the bill does "nothing to help patients" when they buy medicines.
Drug makers have also orchestrated opposition campaigns and employ dozens of lobbyists at the Oregon Capitol to sway lawmakers to their cause.
The Pharmaceutical Industry Labor-Management Association launched an online campaign against Oregon's bill and placed a full-page ad in the Sunday Oregonian criticizing the proposal. That group is funded by some of the world's biggest drug makers: Pfizer, Eli Lilly, GlaxoSmithKline, Merck, AstraZeneca, Johnson & Johnson and the Pharmaceutical Research and Manufacturers of America, among others.
Linthicum, the Klamath Falls senator, said pushback hasn't deterred him.
"It doesn't matter," he said. "We need visibility."
-- Gordon R. Friedman
503-221-8209; @GordonRFriedman