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“Preliminary Draft Rules for Consideration by HB 4005 RAC” (including proposed change to OR
836-053-0473) available at: https://dfr.oregon.gov/help/committees-workgroups/Documents/
prescription-price-transparency/20180828-preliminary-draft-rules.pdf. See especially p. 6.
Jesse O’Brien, DCBS’s Rulemaking Advisory Committee officer, states in his introductory
remarks on the preliminary draft rules for consideration by HB 4005 RAC (beginning at 0:12)
that “public comments” led him to clarify that insurers’ reporting under Section 5 of 4005
must be on a net cost basis. OR4AD is the only consumer organization to file a “public
comment” requesting that insurer reporting under HB 4005 related to drugs’ cost to insurance
plans must be based on net costs to insurer, accounting for rebates and other offsets. See:
OR4AD’s August 24, 2018, comment to the DCBS Prescription Drug Price Transparency
Rulemaking Advisory Committee (HB 4005) — (https://dfr.oregon.gov/help/committees-
workgroups/Documents/prescription-price-transparency/20180824-comments-or4ad.pdf) —
and OR4AD’s August 24, 2018, letter to DCBS/DFR Director Cameron Smith regarding the
charter and composition of the DCBS Prescription Drug Price Transparency Rulemaking
Advisory Committee (HB 4005) — (https://dfr.oregon.gov/help/committees-workgroups/
Documents/prescription-price-transparency/20180824b-comments-or4ad.pdf).
Oregonians for Affordable Drug Prices Now is an Oregon nonprofit corporation (EIN 36-4903497, Reg. 145439493, DOJ No. 54174). IRS License
#C4-4005118, Form 8976, Notice of Intent to Operate Under Section 501(c)(4). OR & USPTO trademark applications pending. Trademark (No.
1078690) and corporate name (No. 1078690) reserved in Washington State.
Page 2 of 13
0:12 Jesse O’Brien, DFR And then finally, the . . . the other issue in these draft rules. Um, I
apologize for the very long, uh . . . uh documentation here which is
mostly just our existing rule, but, um, I just wanted to provide that
context for anyone who is, uh, so unfortunate as to not already be
familiar with our rate review rules.
but this . . . this is a more granular, um, set of information so, um, I, uh,
look forward to feedback on . . . on whether this is uh, whether this is
doable.
Um and uh . . . So those are the . . those are the basic issues in the
preliminary draft rules. Um, and, uh, also on the rate review thing I
expect as is . . . as is usually the case that, um, the data elements will be
somewhat elaborated upon by our product regulation team and our
actuaries when they create the product standards for rate filings um
which actually specify the format in a little more detail, but uh we want
to get at a high level the data elements that are required by the, uh, the
new law.
Oregonians for Affordable Drug Prices Now is an Oregon nonprofit corporation (EIN 36-4903497, Reg. 145439493, DOJ No. 54174). IRS License
#C4-4005118, Form 8976, Notice of Intent to Operate Under Section 501(c)(4). OR & USPTO trademark applications pending. Trademark (No.
1078690) and corporate name (No. 1078690) reserved in Washington State.
Page 3 of 13
0:19 Eric Lohnes, PhRMA And then with respect to uh . . . moving on, um with respect to the . . .
the rate filing, uh, insurance reporting requirements—um, as as we are
always wont to note, um these things need to take place within a
broader context. If these things are going to be discussed in a public
hearing it’s very important today that . . . that the costs that are
discussed are discussed um on a net basis so that um, the . . . the, I think
it’s 150 billion dollars worth of rebates in 2017, um, that that we’ve
discussed often those types of things are considered in the discussion.
0:23 Mark Griffith, OSPIRG And let’s see, with regards to the insurance rate review um my
comments . . . the comments that I’ve submitted have suggested that
any changes should be kept to the minimum necessary to implement
the additional uh requirements of 4005. I mean, this seems pretty
minimal, and it’s certainly . . . is directly referencing the statutory
language in a pretty limited fashion.
0:31 Sadie Ellwood, Kaiser And then finally uh, the rate review rules: Uh, we believe the information
Permanente required to be reported under Section 5 is pretty straightforward and
unambiguous, uh, so we didn’t believe there were any changes that
needed to be made [to the existing regulation].
Oregonians for Affordable Drug Prices Now is an Oregon nonprofit corporation (EIN 36-4903497, Reg. 145439493, DOJ No. 54174). IRS License
#C4-4005118, Form 8976, Notice of Intent to Operate Under Section 501(c)(4). OR & USPTO trademark applications pending. Trademark (No.
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Page 4 of 13
0:37 LuGina Harper- I did want to talk a little bit about the, uh, rate changes that are on page
Mendez, Prime 6. Um, certainly appreciate the fact that you left, um, all of the content
Therapeutics (BCBS) there so we could see what was already in there and how it changes.
A couple of just general comments. Um, this is the first time that we had
seen um PhRMA’s comments as well as this draft, um, rule language, so I
do want to have an opportunity to get back with the health plans that
we work with as well as some of the other PBMs to see . . . to have an
opportunity to look into this, just much like you said, where you need
some smart people to look and see what does this mean and how does
this . . . how would this be implemented.
Um, and I feel that rebates and offsets goes beyond that, um, but a
couple of things also is, um, rebates—the rebates that PBMs negotiate
with PhRMA—uh, there is transparency between the PBM and PhRMA as
to what those rebates are, what we as a PBM have to do in order to
obtain those rebates.
So, um, let’s say that Scott has . . . is Pfizer and he has Lipitor. I’m [going
to] go back several years when the cholesterol drugs were brand-only
drugs. So let’s say Scott is Pfizer and he has Lipitor. And Eric is Bristol-
Myers Squibb and he has Pravachol.
Oregonians for Affordable Drug Prices Now is an Oregon nonprofit corporation (EIN 36-4903497, Reg. 145439493, DOJ No. 54174). IRS License
#C4-4005118, Form 8976, Notice of Intent to Operate Under Section 501(c)(4). OR & USPTO trademark applications pending. Trademark (No.
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Page 5 of 13
0:40 Jesse O’Brien, DFR Can I just ask a clarifying question about that. I mean, that . . . The way,
at least . . . The thing I was trying to get at with the wording here that
was that it . . . all that would actually be listed in the filing would be the
names of the drugs and the ranking, so it wouldn’t actually say “this is
the rebate amount.” It would say uh maybe, Lipitor 5, uh, whatever, you
know, 7. Uh, so it wouldn’t actually be disclosing rebate amounts. Would
. . . would that still raise the same concern?
0:41 LuGina Harper- And, see, I didn’t read . . . again, we need to be able to read that because
Mendez, Prime that’s not how I saw that at all, um or interpreted it, but I think I need a
Therapeutics (BCBS) little bit more time to sit with it.
But I think the other thing I have a concern with is that when you talk
about net rebates . . . net impact of rebates, typically we’re . . . you’re
talking about collectively, like I know you guys use 150 billion or
whatever that amount is. Um, but that’s collective. My concern is that
this is a pretty limited data set of 25 drugs. And so is that really keeping
the information as proprietary as it should . . . I mean, it would be easier
to tease out information with that limited data set.
0:42 Jesse O’Brien, DFR And so, just to clarify. I mean . . . I . . . And if there’s a way that I could
word this so that it was more clear, I’m happy to hear that.
And also just . . . there’s a reason why this is limited . . . why this is
labeled preliminary. We want to make sure everybody gets this to their
people and . . . and gets us the detailed feedback that we need. But what
I was trying to go for is the idea that carriers would be reporting the
names of the drugs and, you know for, for, B, for example, “the most
costly drugs as a proportion of total annual spending,” and, um, so it
would be a list of drugs ranked by their impact on total annual spending
—and including the net impact of rebates and offsets just means that
if one of those drugs would be in a different position because it, um .
. . there were a lot of rebates associated with it, than if you just look
at the list price, that should be included in the ranking.
0:43 LuGina Harper- It does, but again I fall back to the point that if you disclose that
Mendez, Prime information, that hinders our ability to negotiate rebates, and that may
Therapeutics (BCBS) affect patients down the road because they’re not having the benefit of
having a really competitive rebate bidding process.
Oregonians for Affordable Drug Prices Now is an Oregon nonprofit corporation (EIN 36-4903497, Reg. 145439493, DOJ No. 54174). IRS License
#C4-4005118, Form 8976, Notice of Intent to Operate Under Section 501(c)(4). OR & USPTO trademark applications pending. Trademark (No.
1078690) and corporate name (No. 1078690) reserved in Washington State.
Page 6 of 13
0:43 Jesse O’Brien, DFR I . . . I would certainly appreciate more . . . more, uh input on that point
from everyone who has thoughts. But, Rocky—
0:44 Rocky Dallum Oregon . . . certainly from the consumer side, if the rebates weren’t listed and
Bioscience Association you could see the difference between plans, wouldn’t that be good for
the consumer to go and see which plans were getting the rebates and
which plans were negotiating better rebates? Um, just out of curiosity.
But it sounds like we need another legislative discussion on rebates and
PBMs.
0:46 Jennifer Baker, Cambia Well, I just wanted to follow up on um everything . . . LuGina said, that
Health we concur with.
But I did have questions for the DFR in terms of, I mean, including
rebates and offsets clearly exceeds the scope of the bill, the
language of the bill, that . . . There’s nowhere in section 5 that says
“rebates and offsets,” so why would we include that?
0:46 Jesse O’Brien, DFR Well, I mean, I think that one could interpret the bill as trying to get at
the actual total cost of drugs to a carrier and that, um, by including
this in the rule we are just clarifying that we want to get at the total cost,
which should include these other, um, aspects of what goes into the cost
paid by the carrier.
Um, I mean, one could argue that the rule should look different and we
could just ask these questions in the actual rate review process. Or I
mean there are a number of different approaches but um . . . and you
know, depending on what feedback we get we might decide to change
this [CAMBIA: Sure.] approach altogether but that was what I—
0:47 Jennifer Baker, Cambia So going along those lines, then wouldn’t you then require reporting
Health requirements from the manufacturers in terms of what rebates they
offer. If you are [going to] go down the road of including rebates and
offsets, wouldn’t you go down the road of requiring manufacturers to
detail the, uh, the rebates that they offer? If you’re going to be that tra—
if it’s [going to] be a cost transparency.
0:48 Jesse O’Brien, DFR So I’m trying to remember exactly how the bill addresses this because I
haven’t looked at those elements yet. I mean, I have before, but I
haven’t, uh, recently. Yeah, maybe we can, uh, get get into that later.
Oregonians for Affordable Drug Prices Now is an Oregon nonprofit corporation (EIN 36-4903497, Reg. 145439493, DOJ No. 54174). IRS License
#C4-4005118, Form 8976, Notice of Intent to Operate Under Section 501(c)(4). OR & USPTO trademark applications pending. Trademark (No.
1078690) and corporate name (No. 1078690) reserved in Washington State.
Page 7 of 13
0:48 Jennifer Baker, Cambia And yeah, we can further review it, but, I mean, it would make sense, if
Health we’re . . . if the intent of the bill is a cost issue . . . then you would . . . and
you’re [going to] expand the interpretation—in our opinion—of Section
5, which is the reporting requirements for insurers, um, then to also
expand the requirements on the manufacturers of the rebates that they
offer.
0:48 Jesse O’Brien, DFR Um, um, I’m not prepared to speak to that right now.
0:48 Eric Lohnes, PhRMA So, I’d just remind the group that there’s a litany of reportable items on
manufacturers in this bill, um, and uh, Section 5 is in the insurance
code as I recall it. Um, and uh, you know the goal of Section 5 and the
goal of the legislative report that’s indexed to that section is to discuss
cost, and we’re saying context, uh, is king and queen in this situation
and you should absolutely talk about, uh, relevant, warranted uh
distinctions in costs such as uh medical cost offsets and uh rebates and
other . . . uh, other reductions.
So, um, if you’re going to have an actual talk about cost, it needs to be
contextualized properly not just focusing on list price because that
skews uh and misrepresents (if you’re only focusing on that) what
people are actually paying, the cost to the consumer, which I know the
bill expressly talks about, that being a concern.
0:49 Jennifer Baker, Cambia So, are you opposed to manufacturers reporting that information, that
Health they offer . . . ? or no?
0:49 Eric Lohnes, PhRMA I’m saying that manufacturers report a lot of information already in the
bill. And the section we are talking about specifically references insurers.
Oregonians for Affordable Drug Prices Now is an Oregon nonprofit corporation (EIN 36-4903497, Reg. 145439493, DOJ No. 54174). IRS License
#C4-4005118, Form 8976, Notice of Intent to Operate Under Section 501(c)(4). OR & USPTO trademark applications pending. Trademark (No.
1078690) and corporate name (No. 1078690) reserved in Washington State.
Page 8 of 13
0:50 Robert Judge, Moda This is Robert Judge uh from Moda. Um, I’m not prepared yet to speak to
Health the . . . the rebate side of this because I need to kind of read through the
rules.
But I want to respond to the offsets related to medical cost. And I believe
that uh call-out gets away, uh, really confuses the intent of the bill, as
there, you know, are a lot of different considerations as to what
contributes to medical costs, and reporting this information as uh, “a
drug has a specific impact on medical costs” uh, doesn’t consider all the
other standards of care related to treatment of medical conditions. And
so I think if you start asking for that information you’re [going to] end up
really polluting the intent of this bill uh, and uh the information that
you’re trying to gather off of it.
On the rebates, it's a different subject, and, and and I think it requires
some additional thought and consideration.
0:50 Jesse O’Brien, DFR Just to, uh, clarify before we go too down—too deep down the rabbit
hole on that point.
My uh intent was just to say . . . was to mean other offsets in the sense of
other price concessions that . . . that might not take the form of rebates.
Oregonians for Affordable Drug Prices Now is an Oregon nonprofit corporation (EIN 36-4903497, Reg. 145439493, DOJ No. 54174). IRS License
#C4-4005118, Form 8976, Notice of Intent to Operate Under Section 501(c)(4). OR & USPTO trademark applications pending. Trademark (No.
1078690) and corporate name (No. 1078690) reserved in Washington State.
Page 9 of 13
0:51 Rocky Dallum, Oregon Just a quick clarification, Robert. Sounds like you . . . This is Rocky, by
Bioscience Association the way. Haven’t digested the rule because we all just got it. But the . . .
in 4005, Section 5(1)(c), um, talks about listing the 25 drugs that
caused the greatest increase in total plan spending. So if you're not
including—when you determine total plan spending—you’re not
including rebates or offsets when you create that list of 25, I get your
point that we’re not asking you to report it, we asking you to report the
25 that caused the greatest, um, increase in total plan spending. If you
pull out the rebates, then those aren’t the 25 drugs that cause the
increases in spending.
You could also, I think, argue if you don't include the offsets for health
outcomes you’re also not getting the 25. But I don't see how there’s an
intent of that section 5(1)(c) where you’re talking about increases in total
plan spending, both premiums or copays or anything else, that you
would throw, you would throw out rebates and offsets in listing.
So, that’s . . . that’s just an attempt, that’s a question, how you’d get
there.
0:52 Robert Judge, Moda Yeah, uh, that’s why I’d say it requires some additional consideration
Health around that. This is language that I think we have to kind of work
through.
0:53 Jennifer Baker, Cambia Right, right. I agree with Moda. I’m sorry, this is Jennifer again from
Health Cambia. I’d agree . . . We’d just need to maybe be very specific in this
language in terms of the intent before we can really give you actual
feedback in terms of how that will impact the reporting that we do.
So . . . but we can have this discussion.
0:53 Jesse O’Brien, DFR Yes. So, in terms of the intent that I am attempting to express here, it’s
that we want a list of the . . . for the things that, uh, ask for a number of
drugs we want lists of drugs that incorporate the actual total cost of
those drugs to the carriers, so it’s . . . it’s um encompassing all of the
price concessions that are involved, and we . . . we’re not asking for
specific information about what those price concessions are because we
don’t, uh, have the statutory authority to do that—I would say—but um I
think we do have the authority to ask for those drugs to be ranked
on that, on the basis of their actual costs to the carriers.
Oregonians for Affordable Drug Prices Now is an Oregon nonprofit corporation (EIN 36-4903497, Reg. 145439493, DOJ No. 54174). IRS License
#C4-4005118, Form 8976, Notice of Intent to Operate Under Section 501(c)(4). OR & USPTO trademark applications pending. Trademark (No.
1078690) and corporate name (No. 1078690) reserved in Washington State.
Page 10 of 13
0:54 Jennifer Baker, Cambia Right, and I just want to kind of follow up on what Rocky was saying in
Health terms of if we’re going to look at the overall costs, and include the
rebates, we want to include the rebates from both sides. In terms of
getting them from what the . . . what the pharmaceutical industry offers
but also any other additional aid that they get that does impact their
costs, whether it’s federal aid, for advertising, those kinds of things. I
think, it’s worth a discussion on this.
0:54 Rocky Dallum, Oregon But those are two different sections. When we talk about reporting from
Bioscience Association the insurance side, that’s Section 5. When we’re talking about the
manufacturing side, that’s Section 2. [Interjection from CAMBIA: Right,
but it’s an interpretation issue.] It’s a regulatory question whether
Section 5 creates additional reporting requirements under Section 2.
0:54 Robert Judge, Moda And, and, this is Robert Judge again. And just on the rebates in general, I
Health just . . . it gets confused a lot. And I just want to make sure there’s some
clarity around it.
Um, rebates get billed and then they get paid at a time that’s
dependent on when a pharmaceutical manufacturer pays that. So
rebates can be paid six months after you bill or they can be paid three
years after it’s billed, uh, and we’ve experienced everything in between.
0:55 LuGina Harper- Jesse, just one other thing. So one of the other outcomes of House Bill
Mendez, Prime 4005 is the drug transparency task force, which met last week. Um, and
Therapeutics (BCBS) one of the things that was made during the discussions last week was,
um, if you are asking for a point of information you need to validate it
between the parties. So asking for the insurers to report rebates should
be validated by manufacturers reporting the rebates that they offer.
So that was something that the USC folks were saying was that, you
know, you’ve got to be able to, if you say it’s A, then you’ve got to
validate that it’s A from the other party. So . . .
Oregonians for Affordable Drug Prices Now is an Oregon nonprofit corporation (EIN 36-4903497, Reg. 145439493, DOJ No. 54174). IRS License
#C4-4005118, Form 8976, Notice of Intent to Operate Under Section 501(c)(4). OR & USPTO trademark applications pending. Trademark (No.
1078690) and corporate name (No. 1078690) reserved in Washington State.
Page 11 of 13
0:56 Eric Lohnes, PhRMA Um, open to discussion. I understand in our charter, this is not the 4005
Task Force. But I acknowledge this is a point that was brought up. It
sounds like this issue is [going to] receive some more thought and
discussion.
0:56 Jesse O’Brien, DFR I’m sensitive to the point but I also think that, um, the . . . if we were to
hypothetically require, uh, reporting of . . . of rebates from
manufacturers in some format it would not actually be, it would be sort
of comparing apples and oranges to say that that was validating what
the carriers were reporting, because the carriers would be reporting
based on their own claims experience whereas the manufacturers would
be reporting presumably some sort of aggregated national number that
might not be reflective of that, right?
0:57 LuGina Harper- Well I think what you [turns to Cambia representative Jennifer Baker]
Mendez, Prime were saying was for them to report the rebates offered at the carrier
Therapeutics (BCBS) level.
0:57 Jesse O’Brien, DFR That, that, would be a very detailed report.
0:57 Jennifer Baker, Cambia I think, again, if we were going to include rebates. We can take them out.
Health [laughs]
0:58 Robert Judge, Moda This is Robert again. You know, rebates get a lot of attention because of,
Health you know, either because they’re spoken to a lot by the manufacturers
as a . . . as a give-back to kind of reduce the net cost of drugs. I think that
would be reflected in the uh cost information that’s being uh required,
uh so it’s factored in on net cots or what the plan costs are and we do
that as part of our rate filings, um, and I . . . I just want to kind of remind
the the committee, uh, that when we talk about rebatable drugs it’s
really drugs are, um, receiving a rebate for those drugs that carriers have
on formulary, and not all drugs on formulary have rebates, so we’re
talking less than 3% of all drugs that are dispensed—writ large
across the country—have rebates tied to it. So uh, I want to make
sure that we’re focusing on the right side of this thing and not, uh,
trying to put too big of a spotlight on something that has an impact
but not an . . . not an overly significant impact, and I think you’re
collecting that information in the rate information that you’re being
requested for in the statute.
Oregonians for Affordable Drug Prices Now is an Oregon nonprofit corporation (EIN 36-4903497, Reg. 145439493, DOJ No. 54174). IRS License
#C4-4005118, Form 8976, Notice of Intent to Operate Under Section 501(c)(4). OR & USPTO trademark applications pending. Trademark (No.
1078690) and corporate name (No. 1078690) reserved in Washington State.
Page 12 of 13
0:59 Eric Lohnes, PhRMA So permeating this entire discussion is the idea that protection of
confidential trade secret information is absolutely paramount um, but
aggregate level discussions of these things uh is appropriate. Because at
the end of the day what we’re trying to get to, and I respect that we
might be approaching this from different ways, is unless we talk about
cost in the proper context, it’s [going to] skew the discussion and uh,
we . . . I think this group needs to find a way to . . . to . . . to be able to talk
about that with respect to this rule-making so that the presentation of
this information is given in the proper context.
Oregonians for Affordable Drug Prices Now is an Oregon nonprofit corporation (EIN 36-4903497, Reg. 145439493, DOJ No. 54174). IRS License
#C4-4005118, Form 8976, Notice of Intent to Operate Under Section 501(c)(4). OR & USPTO trademark applications pending. Trademark (No.
1078690) and corporate name (No. 1078690) reserved in Washington State.
Page 13 of 13
1:50 Charles Fournier, Yes, Charles Fournier with Oregonians for Affordable Drug Prices Now.
Oregonians for Three quick comments.
Affordable Drug Prices
Now (OR4AD) First, about net prices. I think estimated net prices for drugs are
known by almost all the corporate actors here. Uh, if you don’t know
them you can buy them from SSR Health. And . . . and . . . obviously OHA
knows the net prices of the drugs OHA buys. The only stakeholders
who do not know net prices are consumers. And I think that the task
force can disclose estimated net prices by drug, uh, without breaching
any kind of confidentiality issues.
Thank you.
Oregonians for Affordable Drug Prices Now is an Oregon nonprofit corporation (EIN 36-4903497, Reg. 145439493, DOJ No. 54174). IRS License
#C4-4005118, Form 8976, Notice of Intent to Operate Under Section 501(c)(4). OR & USPTO trademark applications pending. Trademark (No.
1078690) and corporate name (No. 1078690) reserved in Washington State.