(The Center Square) – Two bills in the Oregon Legislature say they would bring drug prices down and boost industry-wide competition, but drug companies claim otherwise.
If you want to pick up medication at your local pharmacy, you have two types to choose from — prescription drugs, which can be bought with a doctor's signature, or generic drugs bearing the same ingredients as their brand-name basis and are sold over the counter to any willing consumer.
In 2018, one out of two American adults took a prescription medication in the past month, according to the CDC, and they're not getting cheaper. Prescription drug prices have shot up 33% nationwide since 2014, according to a report from pharmaceutical information and discount company GoodRx in 2020. Worldwide, Americans pay the highest prescription drug prices to date.
In Oregon, insulin for type 1 diabetes, saw a 2,800% increase from $18 to $522 between 2012 and 2020, according to state findings. In 2018, about 22% of Oregonians stopped taking their prescription medications due to costs.
"Even with two jobs, I still can't afford my insulin and have to rely on my parents to buy it for me," Cameron Locklear of Newport, a diabetic, told the Senate Committee on Health Care in March. "No one should have to work themselves to death to afford a medication that is saving their life."
Bringing new drugs to market can be a long, expensive process due in part to drug patents which grant their holders exclusive rights to make and sell their product. The current term limit for drug patents in the U.S. is 20 years. Those protections can cost generic drug makers millions to challenge in court where the easiest solution is often a reverse payment patent settlement. These settlements' patent holders pay infringers to kill their own lawsuit and stop selling a generic drug for 180 days under the federal framework of 1984's "Hatch-Waxman Act."
Opponents of the so-called "pay-for-delay" agreements have chalked them up as sweetheart deals clogging up the pipeline for drug innovation and increasing costs for patients. The system, they say, gives generic drug makers too much incentive to sue, outsourcing legal costs to consumers.
The Wall Street Journal reported that less than two-thirds of the generic drugs approved by the FDA in 2018 were on the market. The culprit? According to the WSJ, pending drug patent litigation in court was to blame.
Senate Bill 764, sponsored by state Sen. Deb Patterson, D-Salem, would place new duties on Oregon's attorney general and state courts to consider any such settlement with payouts of $10 million or more as "anticompetitive behavior."
The legislation is inspired by California's Assembly Bill 824, which drew inspiration from the Supreme Court's 2013 ruling in FTC v. Actavis deeming drug patent settlements as fair game for antitrust suits, but recommended they be reviewed on a case-by-case basis. The Californian bill is in limbo in the state's Supreme Court on the grounds it may infringe on the federal Commerce Clause.
SB 764 has the backing of AARP Oregon, health insurer Kaiser Permanente, and advocacy groups who argue drug patent settlements fuel a first come, first serve system where only the biggest generic drug makers can afford to fight.
Brett Michelin, a lobbyist for the generic drug manufacturers' group Association of Accessible Medicines, says Patterson's bill will only discourage more generic drugmakers from bringing new drugs to market sooner.
"If this bill was limited to the true paper delay agreements where there's large reverse payments from the brand manufacturer to the generic manufacturer, to make them just go away, we would support a bill like that," Michelin said. "But this bill is so broad that it will capture virtually every type of settlement and make it that much more expensive."
Senate Bill 763 takes on the other half of the equation for Senate Democrats' drug reform agenda — marketing. The bill would have sales representatives register with the state, receive education on ethical standards, and disclose their meetings with providers.
Both bills this session tackle the two issues critical in the state's debate over drug reform: transparency and costs. State lawmakers have until June 28 to decide if either bill fits that criteria before their long legislative session adjourns.