On the first day of the February legislative session, Oregon lawmakers held a hearing on a bill to make drug manufacturers and insurance companies explain their reasoning for dramatic price increases.
The bill says that if a manufacturer wants to increase the cost of their drug by more than 10 percent a year, they have to submit a report.
The bill’s chief sponsor, Portland Democratic Rep. Rob Nosse, said the companies will have to report: the original price of the drug, its cumulative price increases over five years and several other key bits of information.
“We can’t wait any longer to take action to address the lack of transparency and accountability in drug pricing,” Nosse said.
Pharmaceutical companies would also have to release how long a drug has been on the market, any generics if they exist, and research and development costs paid for with public funds.
“The price increases forced upon patients, people who purchase health insurance and government purchasers like the state of Oregon are not sustainable,” Nosse said. “The cost of prescription drugs is one of the most pressing health care issues of our time.”
California passed similar legislation last year. It’s being challenged in court by drug makers.
A number of business leaders from Oregon and elsewhere said they were sympathetic to the intent of the bill, but they’re against it.
Business groups said the bill would require them to give away trade secrets — like the cost of manufacturing a drug.
“I believe in free markets, but today’s prescription drug market is broken,” said Sen. Dennis Linthicum, R-Klamath Falls. “Decades of lobbying has resulted in a protectionist system where drug makers have monopolies for years, stifling competition. Even when alternatives exist, there is little competition and prices do not go down.”
The transparency bill is supported by a large coalition of nurses, pharmacists, doctors, health plans, hospitals and patient and consumer advocates.