Governor, State Lawmakers Attempt to Reach Compromise Over Oregon Health Plan Formulary Proposal

Oregon Gov. John Kitzhaber (D) and Republican leaders in the state Legislature are negotiating a "deal" in order to force action on a bill (HB 3300) that would create a prescription drug formulary for the Oregon Health Plan, the state's Medicaid program, the Portland Oregonian reports. Under the proposal, the state would create a list of preferred drugs that could be purchased at discount prices. Kitzhaber has made the list a "top priority," as he estimates it would save the state $7 million annually. However, as state House Speaker Mark Simmons (R) and state Senate President Gene Derfler (R) oppose the bill, it has "stalled" in the House Health and Public Advocacy Committee. The GOP lawmakers, however, may compromise on the formulary issue, if the governor signs some "key" Republican bills, including a measure that would provide tax breaks for companies based in Oregon that conduct "a lot" of business outside of the state. In order to garner GOP support, Kitzhaber is also reportedly willing to cut $7 million from the health plan's budget -- funding that could then be used to "restore cuts" in programs for seniors and the poor, while still balancing the state's budget.

Industry Opposition
While the governor and Republican legislators are looking to "horse trade" over the formulary issue, the pharmaceutical industry has continued "attack[ing]" the bill with a "small army of lobbyists." In its opposition, the industry says the state may violate antitrust laws if state officials "pressure" HMOs in the Oregon Health Plan to adhere to the formulary. Drug lobbyists also contend that the formulary would hinder access to the "latest drugs," burden physicians with paperwork and give the state a "bad reputation" among venture capitalists and drug companies. While the formulary "by itself" would not affect drug industry profits, Jim Gardner, a lobbyist with the Pharmaceutical Research and Manufacturers of America, said the state is a "national trendsetter." He added, "This could become a template for ... a price- and product-fixing arrangement. The result could be something that looks like Canadian or British health care. It's a pathway to a single-payer system" (Mayes, Portland Oregonian, 6/4).