Oregon Transparency Bill Calls for Reporting of Marketing Costs

Feb. 5, 2018 – A bill to increase price transparency in Oregon, scheduled to be introduced Feb. 5, would require prescription drug manufacturers not only to report drug prices to the state annually, but also would require them to report costs associated with developing and marketing their drugs. If passed, Oregon House Bill 4005 would authorize the state to impose civil penalties on drug makers for failures to comply with reporting requirements.

“Transparency is a loaded word when aimed at drug companies these days,” said Coalition for Healthcare Communication Executive Director John Kamp. “States like Oregon use so-called transparency bills as a first step toward price and marketing controls. Read them with care and beware.”

Oregon lawmakers introduced a bill in 2017 that would have required pharmaceutical companies to list prices of prescription drugs in their ads, but that legislation did not move out of the state’s Health Care Committee.  The new HB 4005, entitled the “Prescription Drug Price Transparency Act,” would require that manufacturers report the following:

  • The name and price of the prescription drug and the cumulative percentage price increase during the previous calendar year;
  • The length of time the prescription drug has been on the market;
  • The factors that contributed to the price increase;
  • The name of any generic version of the prescription drug available on the market;
  • The research and development costs associated with the prescription drug that were paid using public funds;
  • The direct costs incurred by the manufacturer: (a) to manufacture the prescription drug; (b) to market the prescription drug; (c) to distribute the prescription drug; and (d) for ongoing safety and effectiveness research associated with the prescription drug;
  • The total sales revenue for the prescription drug during the previous calendar year;
  • The manufacturer’s profit attributable to the prescription drug during the previous calendar year;
  • The introductory price of the prescription drug when it was approved for marketing by the United States Food and Drug Administration and the cumulative yearly increase, by calendar year, in the price of the prescription drug during the previous five years;
  • The 10 highest prices paid for the prescription drug during the previous calendar year in any country other than the United States; and
  • The documentation necessary to support the information reported.

Under the bill, manufacturers also would have to include information about patient assistance programs provided to Oregon residents, alert the state to planned price increases 60 days before the increase, and provide certain information to the state – including a description of the marketing used – no later than 30 days after introducing a new drug at a price that exceeds a specified threshold. Failure to comply with the bill requirements would subject the manufacturer to civil money penalties, not to exceed $10,000 per day of violation.

Oregon joins other states, such as Connecticut, Michigan, New Jersey and Washington, which are considering drug price transparency legislation this year.