T1DF Statement to Oregon's Joint Interim Task Force on Fair Pricing of Prescription Drugs

HB 4005 should not be needed.

The Oregon Prescription Drug Program (OPDP) created in 2003, with expanded access to all uninsured and underinsured Oregonians via 2006’s Ballot Measure 44, should already be delivering to under- and uninsured individual Oregonians net price transparency and the lowest available price, net manufacturer rebates, at the pharmacy point of sale.

Summary

If this Task Force on Fair Pricing wants to achieve the stated goals of HB 4005—drug-pricing transparency and lower prescription drug prices to Oregonians—it should begin by investigating why OPDP, a program over which the Oregon government has plenary control, has not fulfilled its statutory mandate to deliver the lowest price available, i.e. point-of-sale rebate pass-through to individual members. 

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Lantus insulin was among the three drugs showcased by Oregonians for Affordable Drug Prices Now during this year’s hearings in support of HB 4005. Oregonians for Affordable Drug Prices Now, a campaign organized by third-party payers such as Moda Health—OPDP’s third-party administrator—recruited patients to testify in support of HB 4005. These recruited patients apparently included Debbie Gehlken of Newport, an individual with insulin-dependent diabetes. On February 5, 2018, Ms. Gehlken told Oregon legislators that she was buying Lantus insulin from Canada at $95.35 per vial because she could not afford the $260.28 per vial she would have had to pay at her local Newport pharmacy. Lantus (with its 2016 list price: $239) was also included in the list of “Top 100 Price Increases” submitted by Representative Rob Nosse to the Oregon House Committee on Health Care on February 5, 2018, in support of HB 4005. Senator Linthicum, noting that he and his daughter both have type 1 diabetes, also raised the issue of insulin prices in testimony regarding HB 4005 (citing Lantus’ list price: $256 per vial in February 2016). Members of Oregonians for Affordable Drug Prices Now, UNITE HERE Local 8, OSPIRG, AARP Oregon, Oregon AFSCME, Oregon Progressive Party, the Oregon Nurses Association, SEIU—Oregon State Council (“Our members want to know why the price for their insulin has increased 300% over the last 10 years.”), The League of Women Voters of Oregon, Oregon School Employees Association (OSEA), and Oregon AFL-CIO  intervened in support HB 4005, allegedly for the purpose of providing their members with access to affordable drugs. None of these groups or individuals mentioned OPDP. 

The Oregon Prescription Drug Program (OPDP) was expanded, following passage of 2006’s Ballot Measure 44, to cover uninsured and underinsured Oregonians exposed to list prices, i.e. to prevent the drug price/access crisis HB 4005 now purports to remedy. Most of the above-mentioned organizations supported OPDP’s expansion to under- and uninsured Oregonians in 2006. OPDP was subsequently opened to union plans. As of February 2018, OPDP served over 200,000 members enrolled in the Oregon Educators Benefits Board (OEBB), Public Employee Benefits Board (PEBB), SAIF, the Eastern Oregon Coordinated Care Organization, and other self-insured union plans and government programs statewide, as well as over 300,000 under- and uninsured Oregonians. The Oregon Health Authority (OHA) spent approximately $1.2 billion in 2013–15 on prescription drugs. OPDP is the second largest program among OHA’s four distinct areas of pharmacy expenditures. 

According to Moda Health, OPDP Third-Party Administrator, “under- and uninsured residents benefit from the preferential drug prices that the OPDP discount card has made possible.” This is a gross misrepresentation. OPDP program members (union plans and government programs) receive their share of the manufacturer discounts and more. OPDP individual members, under- and uninsured Oregonians with chronic medical conditions who rely on life-saving ‘deep discount’ specialty drugs such as insulin, do not. 

As of May 2018, the Oregon Prescription Drug Program's per-vial price to individual members for Lantus is $264.81—$5 higher than the pharmacy price quoted by Debbie Gehlken in support of HB 4005 and $9 higher than the list price shown in Senator Linthicum's presentation—instead of the much lower net price (approximately $65) actually paid by third-party payers, including OPDP, after they receive massive rebates from Sanofi amounting to over 70% of Lantus’ list price. 

Under- and uninsured Oregonians were supposed to gain access to the lowest price available—for Lantus as well as other life-saving brand-name drugs—through OPDP. OPDP was created to negotiate large rebates from the manufacturers of brand-name drugs, comparable to the volume-purchasing rebates negotiated by large employers and insurers. OPDP was supposed to pass those rebates through to individual discount card members, so they would benefit from the program’s negotiating power. OPDP has not delivered those rebates to individual discount card holders. OPDP has obtained these rebates, but only passes them to institutional programs and union plans — not to under- and uninsured individuals (discount card members). HB 4005 supporters are thus now blaming drug manufacturers for a price and access crisis actively generated by the Oregon Health Authority’s own breaches of the laws that established and expanded OPDP—including SB 875 (2003), Ballot Measure 44 (2006), and SB 362 (2007). 

If OPDP were not overcharging its individual members, patients like Debbie Gehlken would not need HB 4005, and they wouldn’t be buying insulin from Canada. They would be buying Lantus insulin with OPDP discount cards, at their local Oregon pharmacies, for about $65 per vial (plus a small dispensing fee). That’s the average approximate net cost to insurers and large employers for analog insulins after rebates, and that’s likely about what OPDP is paying. The willful ignorance that the Oregon legislature has embodied in HB 4005 is now directly injuring under- and uninsured Oregonians who rely on deep-discount brand or specialty drugs to stay alive. This Task Force must recognize that OPDP’s ongoing overcharging of Oregonians for life-saving medications is directly exploiting some of Oregon’s most vulnerable people, and is, in the process, putting the health and lives of Oregonians at risk.

The Oregon government has full control over OPDP. OPDP’s third-party administrator, Moda Health, directly and via its PBM, MedImpact, already receives massive rebates from manufacturers. OPDP could thus offer low drug prices, no more than 5% higher than commercial health plans’ low net prices, to under- and uninsured Oregonians right now, without HB 4005 or any other legislated solution. 

The Oregon Legislature’s Task Force on Fair Pricing created by HB 4005 should thus begin by addressing the immediate relief Oregon can provide to under- and uninsured Oregonians at the pharmacy point of sale: access to OPDP’s net prices via rebate pass-through to discount card members. This Task Force should, accordingly, start by asking OHA and Governor Brown’s administration the right questions: 

  • Why don’t uninsured and underinsured Oregonians who subscribe to OPDP’s discount card program already have net pricing transparency and 100% rebate pass-through on brand-name drugs like Lantus insulin? 

  • Why is OPDP charging individual discount plan members full list price for opioid drugs, analog insulin, and glucagon emergency kits? 

  • If OPDP does not pass rebates to all individual members in the form of low net prices (and it demonstrably does not), what does OPDP do with the discount card program’s share of the manufacturer rebates and discounts it prides itself on receiving via its 100% rebate pass-through agreements with Moda and MedImpact?

  • When will OPDP finally transition to drug-by-drug rebate negotiation for specialty drugs, as recommended by The Burchfield Group in June 2017 and stated by Trevor Douglass in April 2018? 

  • If OHA already has access to all pricing data (including manufacturers’ net prices) via OPDP, what is the purpose of HB 4005? Is HB 4005 a blame-shifting tool to distract public attention from OPDP’s past and ongoing failure to pass manufacturer rebates through to under- and uninsured Oregonians in the form of the promised lower prices at the point of sale? 

  • Finally, when will OPDP be audited to assess why it has actually failed to pass through rebates to all Oregonian discount plan members in the form of the lowest possible drug prices, and how much should be refunded to members whom OPDP has required to pay unrebated list prices for drugs on which the program receives deep discounts? 

Mere compliance with the provisions of HB 4005 will cost Oregonian taxpayers over $1 million over the next 4 years—without delivering any reduction in drug prices to under- and uninsured Oregonians at the pharmacy point of sale. This is a waste of taxpayer money and an unconscionable evasive maneuver that obscures the availability of immediate relief, in a program that is entirely under OHA’s control.

OPDP already receives massive manufacturer rebates. OPDP could immediately pass these rebates to its discount card members in the form of low prices at the pharmacy point of sale. The Type 1 Diabetes Defense Foundation thus urges the Oregon Legislature, Governor Brown and the members of the Task Force on Fair Pricing of Prescription Drugs to refocus this Task Force toward auditing the OPDP discount card program’s current failure to actually deliver the lowest available price to under- and uninsured Oregonians—and toward immediately accessible remedies that would deliver low drug prices to Oregonians. 

Oregon Prescription Drug Plan (OPDP)

The Oregon Prescription Drug Plan (OPDP) is a bulk drug purchasing program established in 2003 (SB 875). “This bulk purchasing program [was] designed to allow participants to receive discounted prices and rebates, making drugs available to participants at a lower cost.” The Oregon Prescription Drug Program has now been in the business of managing a prescription drug benefit program for fifteen years.

The purpose of the program is to purchase prescription drugs or reimburse pharmacies for prescription drugs in order to receive discounted prices and rebates; make prescription drugs available at the lowest possible cost to participants in the program; and maintain a list of prescription drugs recommended as the most effective prescription drugs available at the best possible prices. 

Enrollees apply for the program through the Department of Administrative Services, and the department issues each participant a card that may be used when purchasing prescription drugs to secure discounts. Originally, program participation was limited by age and income, but Ballot Measure 44 (2006) opened the program to all Oregonians without prescription drug coverage. 

2006’s Ballot Measure 44 promised that expanding OPDP to all Oregonians would deliver “the best possible prices,” to be achieved by “negotiat[ing] price discounts and rebates with prescription drug manufacturers.” SB 362 (2007) further expanded eligibility to those who are underinsured for prescription drug coverage and to private entities and labor organizations.

OPDP purchases prescription drugs via the Northwest Prescription Drug Consortium (NPDC), an interstate joint venture between Oregon and Washington (OPDP & WPDP) established in 2006. OPDP is thus generally referred to as a multi-state pharmaceutical bulk purchasing program. OPDP is also a state-sponsored prescription discount card program administered by Moda Health and using MedImpact as its PBM. Oregon-based Moda Health (dba Moda), previously known as the ODS Companies, Inc. (dba as ODS Health), is the current contractor (third-party administrator or TPA) for the consortium. Since 2007, Moda has handled all services for the consortium, including network development, claims processing, benefit administration, all drug management programs, mail order, and more recently the group purchasing organization programs for facilities and eligible employer and union groups. MedImpact Healthcare Systems, Inc. (dba PilotRx) handles all claims processing and pharmacy payment. 

The full amount of the rebates is paid or credited directly to the Participating Programs. As eloquently explained by Oregon’s Governor Brown to the U.S. Senate H.E.L.P. Committee in March 2018, “Innovative programs [like the Oregon Prescription Drug Program and the Northwest Prescription Drug Consortium with Washington] have enabled Oregonians to benefit from more aggressive prescription drug pricing, a result of pooling our drug purchasing. Since 2007, groups that joined the Consortium have seen savings on their pharmacy benefit programs, more aggressive prescription drug prices, 100% pass- through pricing on drug costs and manufacturer rebates, lower administrative costs and complete program transparency.”  

Participating Programs thus obtain the lowest net cost for prescription medications. As a result, these programs (state programs, union plans and employer groups) access, via NPDC/OPDP, specialty drugs at a net price that is broadly equivalent to the price negotiated by commercial insurers. The Consortium’s pass-through rebate arrangements apply to both traditional and specialty drugs. Rebates and other remuneration are 100% auditable by OPDP to the National Drug Code (NDC) level. OPDP's stringent performance guarantees are measured and confidentially audited yearly — but they are not subject to any mandatory disclosure from a regulatory authority. OPDP card discount program is thus totally opaque, i.e. operated by OHA outside any form of meaningful public reporting and accountability.

OPDP’s program price is statutorily defined by ORS 414.312(1)(c) as the “lowest possible cost” under ORS 414.312(2)(b); it is as further defined by OHA Rule 431-121-2000(17) to mean the reimbursement rates and prescription drug prices established by the OPDP Administrator directly or indirectly through a contract with a designated entity, including … all applicable manufacturers discounts and rebates.” There is only one definition, and this definition applies to all participating programs as well as OPDP discount card program. 

Individual members of the discount card program, an integral part of OPDP, should then benefit from the low net prices that the expanded discount card program has enabled OPDP to obtain. The Oregon Drug Prescription Program is supposed to help low-income uninsured and underinsured Oregonians afford the high cost of prescription drugs. Yet though OPDP negotiates deep discounts from manufacturers for analog insulins and other brand-name drugs, individual OPDP discount card members pay unrebated list prices for brand and specialty drugs such as analog insulin and glucagon/glucagen hypokits.

Negotiated rebate pass-through to individual members (access to low net negotiated prices) was the primary benefit an expanded OPDP was to deliver.

Supporters of Measure 44 universally described negotiated rebate pass-through to individual members (access to low net prices that commercial insurers receive) as the primary benefit an expanded OPDP would deliver to under- and uninsured Oregonians:

  • The Oregon Nurses Association stated that OPDP would allow uninsured working  Oregonians with diabetes, who couldn’t afford the insulin they need, to have access to affordable insulin.
  • OSPIRG argued that “Oregon consumers deserve the same negotiating power as big insurance companies” and noted that “uninsured Oregonians pay 61% more than what the drug companies charge federal agencies like the Veterans Administration for the same drugs. That’s because the uninsured have no one negotiating lower prices on their behalf. [OPDP] offers a smart solution, leveraging the buying power of more Oregonians to negotiate lower prices. Joining together, consumers have the power to negotiate a fair price for our prescriptions.”
  • SEIU Local 503 also pledged that, with OPDP, “Oregonians will have the right to negotiate reduced prescription prices – just like the big insurance companies do now.”
  • The AARP argued that OPDP would give uninsured, but also insured with high out-of-pocket costs (e.g. seniors on Medicare Part D who fall into the “donut hole”) access to a valuable safety net in the form of affordable life-saving medicines, increase access to more affordable life-saving medicines, and rein in prescription drug costs. 
  • The AFL-CIO noted that “[w]e all know that buying in bulk saves money. This holds true for buying medicine. The more Oregonians join together, the more power we have to get discounts that lower health care costs for all of us.” Tom Chamberlain, President, Oregon AFL-CIO, also candidly admitted that “Measure 44 won’t cost taxpayers a single extra penny, because the administrative expenses to run this program are already in place. By negotiating with drug manufacturers and  pharmacies, and gaining health care savings across the state, Measure 44 pays for itself” — i.e. manufacturer rebates earned by under- and uninsured Oregonians who buy brand and specialty drugs would be used to offset the program costs instead of decreasing the cost of these drugs to this subset of patients.
  • The Oregon State Fire Fighters Council hoped that “Measure 44 [would ensure] that everyone in Oregon gets a fair deal. Individuals [would] have the same bulk purchasing power that the big insurance companies have when they negotiate lower prices with the drug companies.”
  • The League of Women Voters of Oregon believed that OPDP “will lower prescription drug costs by up to 60 percent for more than one million Oregonians estimated to be without prescription coverage, by allowing them to be part of a purchasing pool [and  thus benefit from] the savings realized from deep discounts, rebates and grants negotiated with drug companies.”
  • Measure 44 Sponsor Senator Bill Morrisette pledged that “[u]nlike the federal government’s prescription drug plan, the Oregon Prescription Drug Program … actually lowers prescription drug prices… [and has] a strong track record of saving participants as much as 60% off their medications.”
  • The Oregon AFSCME Retirees Association pledged that “participants can use their OPDP card at 90% of Oregon pharmacies and nationwide chains to pay the discounted price for their prescriptions.”

In their statements in support of Measure 44 published in the Official 2006 General Election Voters’ Pamphlet, supporters mentioned “diabetes” five times, “insulin” two times, and “chronic disease” seven times. In 2018 the same groups, supporting HB 4005, did not mention OPDP once—despite the same heavy emphasis on ‘out-of-control’ insulin prices and diabetes.

Measure 44 passed with 78% of the vote. OPDP has a clear and uncompromising mandate for passing the full benefit of low negotiated drug prices net of manufacturer rebates (equivalent to the low net prices negotiated by commercial insurers) to under- and uninsured Oregonians. Despite its political legitimacy, this mandate has yet to be implemented.

Senate Bill 362, passed by the House in 2007, subsequently expanded OPDP to include underinsured Oregonians but also labor organizations and employer-sponsored health plans—the same groups that this year supported HB 4005. SB 362, like HB 4005 some years later, was passed on an emergency basis, “for the immediate preservation of the public peace, health and safety.” The emergency clause was added as Section 3 (previously the audit clause) by the House  Committee on Health Care out of concern for “individuals who lack insurance or are underinsured for prescription drug coverage.”

According to State Representative Nancy Nathanson, by “piggybacking on [November 2006] successful Ballot Measure 44, [SB 362 was to] greatly increase the number of people” who should have benefited from lower drug costs. Governor Ted Kulongoski promised, in April 2007, that “[t]hrough the power of bulk purchasing for prescriptions and by pooling resources together, the state is able to negotiate lower prices for prescriptions than what individuals and businesses normally could negotiate.“ 

OPDP has more than doubled in size, but the savings did not materialize for individual members of its discount card program who need ‘expensive’ brand and specialty drugs such as Lantus insulin. 

Through OPDP, Lantus insulin should now be available to under- and uninsured Oregonians for a low net price at or below $68.25 per vial. And yet, in February 2018, Debbie Gehlken, an individual with insulin-dependent diabetes who testified in support of HB 4005, told Oregon legislators that Lantus insulin, at her local Newport pharmacy, then cost $260.28 per vial —a price consistent with the Oregon Average Actual Acquisition Cost and CMS’ National Average Drug Acquisition Cost in late 2017. She reportedly could not purchase Lantus insulin in Oregon at a price remotely close to the low net price negotiated by commercial health plans (about $65 per vial) or even to the higher price she paid a Canadian retailer ($95.35 per vial). 

In her testimony, Ms. Gehlken did not mention OPDP’s failure to give her access to the lower prices available to commercial insurers; she solely blamed insulin manufacturers for her plight, accusing the pharmaceutical industry of price gouging resulting in “Oregonians like [her] paying too high a cost just to stay healthy.” Ms. Gehlken did not apparently realize that OHA’s OPDP—not Sanofi—could have prevented her from overpaying for her Lantus insulin, had OPDP not been left “unchecked and unaccountable to Oregonians.” Patients like her are not the victims of market dysfunction; they are the victims of regulatory dysfunction and systemic breakdown of public oversight over an OHA-managed public PBM program that has for years been overcharging under- and uninsured Oregonians (discount card program members) while, on the other hand, delivering the full benefit of its low net negotiated prices to state employee health plans and union plans. Patients like Ms. Gehlken have been the victims of Oregon’s failure to execute the mandate delivered by the laws that created and then expanded OPDP.

The State of Oregon has the power, and now has the duty, to fulfill its legislated mandate by immediately directing that the OPDP discount card program pass estimated rebates, in the form of the lowest possible net prices, to its individual discount card members at the pharmacy point of sale. 

OPDP has failed to deliver net negotiated prices to individual OPDP members who use deep-discount rebated drugs like insulin.

OPDP seeks rebates from manufacturers, Group Purchasing Organizations and Wholesalers in order to provide the lowest possible drug prices to all participants in the program. Underinsured individual participants are supposed to be able to purchase, though OPDP, prescription drugs at the same discounts large employer groups receive.

At the program level, OPDP benefits from 100% rebate pass-through agreements (including pharmacy costs and rebates) with a flat administration fee per paid transaction (instead of rebate retention rate), resulting in “100% transparency on pharmacy discounts, rebates and administration fees.” In March of this year, Governor Brown testified to the U.S. Senate HELP committee that state programs like OPDP and the Northwest Drug Pricing Consortium obtain “100% pass-through pricing on drug costs and manufacturer rebates.” These rebates are not passed through to individual discount card members, under- and uninsured Oregonians. 

As of February 2007, OPDP had enrolled approximately 12,500 individual enrollees with an average savings of $28 per prescription. These Oregonian seniors were supposed to receive 60% discounts on their drug prices. In 2017, NPDC (OPDP and WPDP) facilitates more than $800 million in annual drug purchases for over 1 million people in participating groups and facilities. As of February 28, 2018, 305,407 un- or underinsured Oregonians (or 123% of the state’s reported uninsured rate) relied on OPDP for purchasing their drugs. OPDP officially reports that, in 2017, “Discount Card Program Members” received an average 78% rebate on list prices, i.e. only spent $4,628,314 for point-of-sale claims expense (pharmacies’ acquisition costs or list prices) amounting to $17,056,153. And yet, OPDP prices all opioid and insulin brand or specialty drugs sold to individual discount card members at full, unrebated, list prices. For example, OPDP charges its individual discount card members $269.85 per 10 ml vial for Humalog insulin and $270.71 for Novolog. OPDP's per-vial price to individual members for Lantus is $264.81. Meanwhile, nationwide, average net cost to large employer plans or insurers for these same vials of insulin is about 1/4 this amount, around $65 per vial.

Whatever savings OPDP may negotiate as a program, OPDP’s claim that discount card program members receive a 78% rebate on average is thus likely to be grossly inaccurate. Manufacturer rebates are paid to OPDP by Moda as lump sums on a monthly schedule. These rebates are not passed through to discount card members at the point of sale on a drug-by-drug basis in the form of the lowest price available. Nor has OPDP passed through these rebates to the individual members who bought rebated specialty or brand-name drugs in the form of post-transaction refunds.

The requirement that the Joint Legislative Audit Committee conduct a performance audit on the operation of the Oregon Prescription Drug Program to identify net savings, if any, to the participants in the program was deleted from SB 362 in committee. To date, no public audit of OPDP’s discount card program has been performed to explain the discrepancy between the high list prices offered by OPDP to individual members (unrebated list prices) and its claim of 100% rebate pass-through.

The Oregon Health Authority (OHA) has structured OPDP’s contracts with Moda to specifically prevent OPDP from publicly documenting drug-by-drug rebate allocations, i.e. net prices. OPDP’s contract with Moda delegates the annual audit of Moda’s rebate negotiation and rebate program performance to an independent third party, with only summary information disclosed to OPDP,  keeping drug-by-drug rebate evaluations, and thus net price estimates, outside OPDP’s public records and thus out of reach of the public.

OHA has, however, the authority to demand that Moda Health and its PBM, MedImpact, allocate these lump sum payments on a drug-by-drug basis based on the manufacturer rebates they actually receive. Doing so would also lead to improved commercial performance. A recent evaluation by outside consultants The Burchfield Group concluded that the current mechanism used by OHA/OPDP to pass through manufacturer rebates leads to sub-optimal commercial outcomes. As a result, “specialty drug pricing [i.e. discount obtained] is below market.”

In order to reduce OPDP’s net costs for specialty drugs, OPDP’s own consultant has recommended “eliminating the effective rate guarantee over all specialty drugs and obtaining drug-by-drug pricing,” with reimbursement to pharmacy networks based on acquisition cost plus fee. Instead of auditing OPDP and requiring the immediate implementation of the Burchfield Group’s recommendations—creating a drug-by-drug pricing structure that would finally result in passing the low net prices OPDP negotiates with manufacturers through to under- and uninsured Oregonians, it seems that Oregon’s legislature, union plans and health insurers have instead focused the state’s attention on passing a blame-shifting ‘transparency’ law, HB 4005, that implausibly asserts the state is not otherwise capable of understanding pricing in a sphere where Oregon has played an active role for 15 years. 

Under- and uninsured Oregonians desperately need lower prices at the point of sale. But HB 4005 will not deliver any price relief to under- and uninsured Oregonians as long as OPDP is allowed to continue overcharging its individual members of its discount card program. Correcting OPDP’s failure to pass through low negotiated prices at the pharmacy point of sale is the obvious first step in addressing a drug price/access crisis that HB 4005 has itself declared to be an emergency.

Only fixing Oregon’s existing prescription drug program will immediately achieve the stated goals of HB 4005 and deliver price relief to under- and uninsured Oregonians.

Oregon can achieve both the stated goals of HB 4005— “drug pricing transparency” and “lower prices to Oregonians”—tomorrow, simply by directing that OPDP fulfill its legislated mandate to disclose net negotiated costs and deliver 100% point-of-sale rebate pass-through to individual members.

This Task Force should thus:

  • Investigate how the State of Oregon has used the manufacturer rebates OPDP has obtained during the past 15 years on deep-discount rebated drugs like insulin and why OPDP has continued to charge individual OPDP members full list prices for heavily rebated diabetes and opioid drugs, among others. Individuals like Newport resident Debbie Gehlken, who testified in support of HB 4005, would not have any need to buy insulin from Canada if OPDP were delivering its low net negotiated prices to uninsured or underinsured Oregonians who have high out-of-pocket costs or find themselves in the Medicare Part D donut hole.

  • Investigate OPDP’s failure to refund any portion of the manufacturer rebates OPDP has received to the individual Discount Card Members who have purchased heavily rebated drugs. 

  • Investigate OPDP’s current contract with Moda, including the structure of its rate guarantee, audit regime and point-of-sale pricing in relation to OPDP’s mandate to charge Discount Card Members the lowest possible prices. 

  • Investigate OPDP’s ongoing failure to transition to drug-by-drug pricing/rebating for specialty drugs and to actually pass manufacturers’ rebates to Discount Card Members in the form of the lowest possible net price at the pharmacy point of sale.

  • Investigate the Oregon Department of Justice’s and Department of Consumer and Business Services’ ongoing failure to audit OPDP regarding its failure to deliver promised savings to Discount Card Members while programs, such as the Oregon Educators Benefit Board (OEBB), have received the full benefit of manufacturer rebates and other discounts. 

  • Seek public disclosure of OPDP’s estimated net prices for deep discount specialty drugs  that Moda and MedImpact have negotiated with drug manufacturers on behalf of OPDP and that OPDP should have passed through to its discount card members, under- and uninsured Oregonians, in the form of the lowest prices available. 

  • Address, in its final report, OPDP’s breach of the public trust.

Full report, with footnotes, available below or at: https://www.scribd.com/document/379790430/T1DF-Comment-to-Oregon-Task-Force-on-Fair-Pricing-May-19-2018



About T1DF

Oregon-based 501(c)(3) nonprofit Type 1 Diabetes Defense Foundation is America's only legal advocacy organization dedicated to advancing equal rights and opportunities for Americans with type 1 and other forms of insulin dependent diabetes. T1DF accepts no funding from the pharmaceutical, medical device, pharmacy benefit management, or insurance industries or from any organization they fund. We support regulatory frameworks in which manufacturers compete directly on innovation and price to consumers and where drug channel actors can engage in open and efficient price arbitraging, without price discrimination and asymmetries of information.