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House passes bill requiring reasons for drug price increases

House Bill 4005 would require manufacturers to disclose reasons for price increases, including the cost of production, research and marketing in cases when a price is raised more than 10 percent.

JAIME VALDEZ/PORTLAND TRIBUNE - The 2018 Oregon Legislative Assembly in the House of Representatives at the Oregon State Capitol in SalemSALEM — The Oregon House of Representatives has overwhelmingly approved a bill to require pharmaceutical manufacturers to disclose reasons for steep increases in the cost of prescription drugs.

With a bipartisan vote of 46-to-14 Wednesday, the legislation now proceeds to the Senate for consideration.

Rep. Rob Nosse, D-Portland, who spearheaded development of the proposal, said House Bill 4005 is "a first step" toward unraveling the complicated reasons for the country's expensive health care system.

"This legislation will help us take the first step, a step we need to take to begin to get at the fastest growing expense we have in health care — prescription drug costs," Nosse said. "Oregonians deserve to have transparency in something as vital to good health as prescription drugs. My hope is that this legislation will set us down a path to making health care more affordable for everyone."

When the price of a prescription drug increases greater than 10 percent, the bill requires the manufacturer to report the reasons to the Oregon Department of Consumer and Business Services, including information related to the cost of production, marketing and research. Manufacturers face civil penalties of up to $10,000 per day for noncompliance.

The proposed program is modeled after one recently approved in California.

With federal inaction on drug prices, several other states have sought the power to monitor drug prices and enhance transparency around pricing. Among them are California, Maryland, Nevada, New York and Vermont, according to a report by the Washington Post.

Some other states that are considering or debating versions of the Oregon legislation, including at least Colorado and Illinois, said Jesse Ellis O'Brien of the Oregon State Public Interest Research Group.

"The prescription drug market is a dysfunctional, with manufacturers operating with big payers held hostage to profiteering," said Rep. Andrea Salinas, D-Lake Oswego. "House Bill 4005 won't send prescription drug prices plummeting, but it will help us unveil the truth behind the cost drivers when drug manufacturers set the initial price."

Rep. Ron Noble, R-McMinnville, said the bill would help shed light on the price of pharmaceutical drugs.

"Sunshine is the best disinfectant," he said.

Between 2013 and 2015, national spending on prescription drugs increased by about 20 percent and accounted for an estimated 17 percent of health care spending, according to researched published in the Journal of the American Medical Association.

Unlike most industrial countries, the United States does not negotiate the price of prescription drugs with manufacturers. As a result, Americans pay more for most drugs.

GOP gubernatorial candidate Rep. Knute Buehler of Bend, who is a surgeon by profession, voted for the bill but called it "thin soup."

"I am not confident that this is going to solve the problem," said Buehler, who is a surgeon by profession.

He said some pharmaceutical companies would likely resist transparency by claiming information about pricing are trade secrets. Trade secrets may remain confidential under state law.

Debbie Gehlken of Newport, who has diabetes, testified during committee hearings earlier this month that the price of her insulin is more than double than in Canada.

"I am grateful that lawmakers stood up for us against the powerful pharmaceutical companies and voted to finally bring transparency to steep drug price increases," she said in a statement after Wednesday's vote.

Two Democrats and two Republicans were chief sponsors of the bill: Nosse, Noble, Sen. Lee Beyer, D-Springfield; and Sen. Dennis Linthicum, R-Klamath Falls.

Paris Achen
Portland Tribune Capital Bureau
email: pachen@portlandtribune.com
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