Oregon PBM Audit Confirms Need for Reforms, Say Pharmacy Orgs

NCPA August 22, 2023

WEST LINN, Ore. (Aug. 22, 2023) – The Oregon State Pharmacy Association and the National Community Pharmacists Association echo the Oregon Health Authority’s recommendation that the state “should enact legislation that focuses on patient and pharmacy protections and increasing transparency in the prescription drug supply chain.” The recommendation was within the much-anticipated state audit report on pharmacy benefit managers released Monday.

Among other findings, the audit confirms that Oregon’s regulation of PBMs is limited and fragmented; that while the Oregon Medicaid program has improved some of the coordinated care organizations contract language, the agency does not ensure sufficient transparency and compliance by PBMs; and that pharmacy reimbursements were inconsistent and varied greatly depending on the pharmacy, drug, and PBM. It specifically found that national chains, some of which are owned by PBMs or PBM parent companies, were reimbursed twice the amount independent pharmacies were for selected drugs.

The audit builds upon a 2022 report OSPA released in collaboration with 3 Axis Advisors that illustrated worrying tactics PBMs employ to increase their profits at the expense of local pharmacies, taxpayers, and patients. That study also found PBMs in Oregon to be reimbursing pharmacies at wildly different rates while at times charging Medicare and Medicaid astronomical prices.

“This audit, along with our independent report, provides unwavering support for why PBM reform is needed in Oregon,” said Brian Mayo, executive director at OSPA. “OSPA will work in partnership with our state legislators to pass PBM bills during the 2024 legislative session. PBMs manipulated the system in 2023 and we won’t let it happen again.”

The outcome of this audit is similar to Medicaid audits conducted in numerous other states. It underscores the importance of Congress passing meaningful Medicaid managed care reform that prohibits spread pricing, provides increased transparency, and ensures fair pharmacy reimbursement in all state Medicaid managed care programs. These specific reform provisions are currently included in PBM reform packages in both the U.S. Senate and House of Representatives.

“Momentum is growing in Washington for investigations into and reforms of PBMs, and this audit adds fuel to the fire,” said NCPA CEO B. Douglas Hoey, pharmacist, MBA. “Stopping PBMs from abusing employers and taxpayers through harmful spread pricing and creating pharmacy deserts through underwater reimbursements is a priority of NCPA’s and should be a priority in Oregon. We’re eager partners in getting these policies over the finish line in the state and nationally as well.”


About the Oregon State Pharmacy Association
Oregon State Pharmacy Association was founded in 1889 as a professional trade association representing its member community of pharmacists, pharmacy technicians, pharmacy students and others who have an interest in advancing the practice of pharmacy through advocacy and education, and thereby improving the health of our fellow Oregonians. OSPA represents pharmacists statewide before the State Legislature, state agencies, Congress and with other health care stakeholders. To learn more about our efforts to protect pharmacists and patients, visit www.oregonpharmacy.org.

About the National Community Pharmacists Association
Founded in 1898, the National Community Pharmacists Association is the voice for the community pharmacist, representing over 19,400 pharmacies that employ nearly 240,000 individuals nationwide. Community pharmacies are rooted in the communities where they are located and are among America's most accessible health care providers. To learn more, visit www.ncpa.org.