Oregon Governor Signs Law to Establish Rx Drug Formulary for State Health Plan
Gov. John Kitzhaber (D) on Aug. 2 signed into law a measure that could reduce prescription drug costs in the Oregon Health Plan, predicting that pharmaceutical companies -- "once unified in opposing" the law -- will "soon compete among themselves to be included" on a new state drug formulary, the Portland Oregonian reports (Lednicer, Portland Oregonian, 8/3). The new law will establish a panel of medical experts to study medical literature about classes of drugs to determine which treatment "is the most effective in its class" and to release the findings to the public. Under the law, the state will "discourage" physicians in the Oregon Health Plan, which covers 260,000 Medicaid beneficiaries and 90,000 other low-income residents, from prescribing a drug that "is more expensive but not more effective" than the treatment recommended by the panel. Kitzhaber said that the law will help control costs in the Oregon Health Plan, which will likely spend $885.3 million on prescription drugs in the next two years -- a 61% increase from the previous budget (Kaiser Daily Health Policy Report, 8/1). John Santa, administrator for the state Office for Oregon Health Plan Policy and Research, said that the state will place between 15 and 20 preferred drugs on the formulary, including treatments for heartburn and high cholesterol. However, the formulary will not include cancer, mental illness and AIDS drugs. According to Kitzhaber, the law will likely save the state about $7 million over the next two years.
Limits for 'Less Needy'
Meanwhile, Kitzhaber also signed a bill last week that would extend Oregon Health Plan coverage to 50,000 uninsured residents and limit benefits for the "less needy," such as single residents and couples without children. State health plan administrators are now awaiting federal approval of the new limits (Portland Oregonian, 8/3). For further information on state health policy in Oregon, visit State Health Facts Online.
