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Yesterday, Oregon’s Senate voted unanimously 25-0 to pass HB 2658 (4 members were excused). The bill requires drug manufacturers to provide 60-days advance notice to the state and to health benefit carriers before implementing significant price increases for prescription drugs. California approved a similar policy in 2017.
The rising cost of prescription drugs is an unsustainable burden on the budgets of both Oregon consumers and the state itself. Over the last five years, drug prices increased at 10 times the rate of inflation. National polls have found that one-in-five Americans reported not purchasing a prescription because of the price, while one-in-ten reported skipping doses or splitting pills against doctor’s orders.
The cost of drugs impacts all consumers, including those who do not use prescription drugs: Oregon’s insurance companies claimed drug inflation trends as high as 13.5% for their 2020 rate requests - far above medical inflation for all other services. This demonstrates how rising prescription costs are driving up insurance premiums for everyone, while taxpayers bear the cost of drug benefits under Medicaid and Medicare.
Under the new law, manufacturers of brand name drugs must give 60-days advance notice of yearly increases over 10% or $10,000, while manufacturers of generic drugs are required to give notice of increases over 25% or $300. In California, which implemented its bill during the summer of 2018, several planned price increases were canceled following public outrage about the planned hikes.
OSPIRG Health Care Advocate Numi Lee Griffith issued the following statement on passage of HB 2658: “HB 2658 is an important policy, which builds on the foundation of Oregon’s landmark 2018 Drug Price Transparency Act. Pharmaceutical price gouging is out of control, and we need to take concrete action to rein in rising costs.” She concluded, “At the very least, patients deserve some warning before price spikes.”
Following confirmation of Senate Amendments in the House, the bill will advance to the desk of Governor Kate Brown, who is expected to sign it into law.
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