P.O.

Box 10841
Eugene, Oregon 97440
p/f: 541.257.8878
info@t1df.org
March 6, 2018
www.t1df.org

Governor Kate Brown

Office of the Governor
900 Court Street, Suite 254
Salem, OR 97301-4047

RE: HB 4005 — discriminatory implications of Oregon’s recently passed drug-pricing

“transparency” bill

Dear Governor Brown,

I write to you as an Oregon resident, as the parent of a child with type 1 diabetes, and as
president of the Type 1 Diabetes Defense Foundation. T1DF is a nonpartisan Eugene-based
501(c)(3) nonprofit dedicated to advancing equal rights and opportunities for Americans with
type 1 and other forms of insulin dependent diabetes. We depend on individual donations
and accept no industry funding.

As you are of course aware, Rep. Rob Nosse’s (D-Portland) HB 4005 sped through the
Senate last week and is headed to your desk for signing. I am writing to urge you not to sign
this bill—which will place Oregon behind the curve on a rapidly emerging issue, where
litigation and related disclosures are exposing a massive injury by insurers against
Oregonians and other Americans who rely on heavily rebated specialty drugs and biologics
like insulin.

I’m attaching a March 6 op-ed from The Register-Guard, in which I outline the
discriminatory implications of HB 4005’s selective transparency regime, and its troubling
opacity regarding insurers’ failure to pass through rebates. Also today came UnitedHealth’s
major announcement that next year it will begin passing through “millions” (more realistically,
billions) in rebate dollars to individual insured consumers. UnitedHealth/OptumRx is a
defendant in multiple lawsuits T1DF filed last year on PBM/insurers’ failure to pass through
rebates to individual patients with insulin-dependent diabetes.

UnitedHealth’s announcement today demonstrates—as HB 4005 does not and cannot,

because it fails even to acknowledge rebating as a factor in drug pricing—that health insurers
do possess discretionary power over massive rebates that for years they have kept secret
from consumers. PhRMA may sue if HB 4005 becomes law (as they did against SB 17, on very

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narrow grounds); T1DF may sue as well, regarding the bill’s discriminatory implications. This
bill achieves no state interest; wastes taxpayer resources to administer a complex reporting
structure in pursuit of information that could largely be obtained at a fraction of the cost from
third-party suppliers such as SSR Health, IQVIA, or IBM Truven (or at no cost from insurance
companies or, on insulin, from T1DF); discriminates against people with disabilities and
chronic medical conditions; and may be costly to defend in court.

Rather than sign this bill—placing Oregon in the false position of supporting an insurer-
directed narrative that even insurers themselves are now finding it expedient to abandon—
Oregon’s governor should send legislators back to the drawing board to create a true drug-
pricing transparency bill. Oregon should, moreover, be demanding an investigation of
insurers who do business in the state, and of state insurance commissioners who have failed
to address a practice that for years has had a direct, detrimental, and exponentially increasing
impact on the prices paid by people who can stay alive only if they have affordable access to
life-saving drugs or biologics like insulin.

Regards,

Julia Boss
President
Type 1 Diabetes Defense Foundation

Attachments:

Boss, “Drug transparency bill ignores role of insurers,” The Register-Guard, Eugene, Oregon,
March 6, 2018. Available at: http://registerguard.com/rg/opinion/36518187-78/drug-
transparency-bill-ignores-role-of-insurers.html.csp

Bruce Japsen, “UnitedHealth Group Will Pass Drug Maker Rebates Directly To Customers,”
Forbes, March 6, 2018. Available at: https://www.forbes.com/sites/brucejapsen/2018/03/06/
unitedhealth-will-pass-drug-maker-rebates-to-more-customers/1

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UnitedHealth Group Will Pass Drug Maker Rebates Directly To Customers 3/6/18, 2)57 PM

 / Pharma & Healthcare / #Medicine

MAR 6, 2018 @ 07:01 AM 2,723  2 Free Issues of Forbes

UnitedHealth Group Will Pass Drug

Maker Rebates Directly To Customers
Bruce Japsen , CONTRIBUTOR
I write about healthcare business and policy FULL BIO 
Opinions expressed by Forbes Contributors are their own.

TWEET THIS

UnitedHealth Group executives say the move is part of a broader effort to “simplify pharmacy
 benefits

Shutterstock

UnitedHealth Group said Tuesday it will pass along pharmacy

discounts it gets from drug manufacturer rebates via a new program
for its full-insured customers at the point of a prescription sale.

Effective Jan. 1, 2019, the nation’s largest health insurer said people
enrolled in UnitedHealthcare “fully insured commercial group
benefit plans" will have discounts applied when they fill their
prescriptions at the retail pharmacy or through home delivery.
There are 7 million people enrolled in such UnitedHealthcare fully
insured group benefit plans and it would be an optional program for
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UnitedHealth Group Will Pass Drug Maker Rebates Directly To Customers 3/6/18, 2)57 PM

insured group benefit plans and it would be an optional program for

self-insured employers.

The news comes as pressure builds on drug benefit managers and

health insurance companies to pass along rebates they get from
pharmaceutical manufacturers directly to their health plan
members. Historically, health insurers have said they use such
rebates to keep premiums affordable, but drug manufacturers have
taken issue with that defense questioning whether that’s always the
case.

The savings apply "to plan participants who are filling a

prescription for a drug where the manufacturer provides a rebate,"
UnitedHealth said. Not all drugs come with a rebate.

For its part, UnitedHealth Group executives say the move is part of
a broader effort to “simplify pharmacy benefits  , deliver savings
directly to its customers and improve their health care experience.”
UnitedHealth Group owns the pharmacy benefit manager (PBM)
OptumRx.

“UnitedHealthcare is uniquely positioned to deliver new value and

clarity to health care, and pharmacy benefits in particular,” said
Dan Schumacher, president and chief operating officer of
UnitedHealthcare, the health plan business of UnitedHealth Group.
“Our differentiated pharmacy model, powered by OptumRx, is
delivering solutions that lead to better health outcomes and make
prescription drugs more affordable.”

UnitedHealth Group and OptumRx aren’t the first administerers of

drug benefits to process point-of-sale rebates to their clients. The
PBM Express Scripts last year launched the SmartShare Rx
program, which the company says works for clients that offer high
deductible health plans. CVS Health, which operates the Caremark
PBM, says it also offers point-of-sale rebates.

Recommended by Forbes


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UnitedHealth Group Will Pass Drug Maker Rebates Directly To Customers 3/6/18, 2)57 PM

UnitedHealth Group Hits Express Scripts Says PBM

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