Understanding Pharmacy Reimbursement Trends in Oregon

New Study: Inequity in Pharmacy Benefit Managers’ Drug Pricing Practices in Oregon Raises Serious Questions

Patients, pharmacists and providers in the state are disadvantaged by inequitable and worsening PBM business model

West Linn, Oregon (Oct. 27, 2022) – The Oregon State Pharmacy Association (OSPA), in collaboration with 3 Axis Advisors, released a report today that illustrates the worrying tactics that pharmacy benefit managers – middlemen health insurance companies – employ to increase their profits at the expense of local pharmacies, taxpayers and patients. The study, Understanding Pharmacy Reimbursement Trends in Oregon, found that PBMs are reimbursing pharmacies at wildly different rates while at times charging Medicare and Medicaid astronomical prices.

“What we found is that PBMs – these middlemen in the drug supply chain – are essentially free to set the prices of drugs wherever and however they choose and, as a result, our state is rapidly losing small local pharmacies. That’s because these pharmacies aren’t being reimbursed at rates that allow them to keep their doors open, which raises serious questions about what PBMs are up to and why,” said Brian Mayo, Executive Director of the Oregon State Pharmacy Association.

One particularly troubling example detailed in the report shows that the state Medicaid program, which provides health care coverage to low-income Oregonians, was made to pay more than eight times the manufacturer’s asking price for a generic multiple sclerosis drug. If the payment was instead based on the manufacturer’s list price ($350) instead of what PBMs charged Medicaid on average ($2,928), the state could have saved approximately $1.9 million on this one drug alone.

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