HOUSE COMMITTEE ON

AUDIT & HUMAN SERVICES BUDGET REFORM

 

April 08, 2003 Hearing Room 50

3:15 PM Tapes  88 - 89

 

MEMBERS PRESENT:            Rep. Ben Westlund, Chair

Rep. Steve March, Vice-Chair

Rep. Jeff Kruse

Rep. Jeff Merkley

Rep. Alan Bates

 

MEMBERS EXCUSED:            Rep. Randy Miller

Rep. Susan Morgan, Vice-Chair

 

GUEST MEMBERS:               Rep. Mitch Greenlick

                                                Rep. Laurie Monnes Anderson

                                                Rep. Carolyn Tomei

 

STAFF PRESENT:                  Rick Berkobien, Committee Administrator

Kelly Fuller, Committee Assistant

 

 

ISSUES HEARD:                     Informational Meeting - Invited Testimony Only

                                                Fully Capitated Health Plan's Management of Prescription Drugs

                                                Patricia Gibford, CEO, Central Oregon Independent Health Services

                                                Chris Kirk, MD, Mid Valley Independent Physicians Association

 

These minutes are in compliance with Senate and House Rules.  Only text enclosed in quotation marks reports a speaker’s exact words.  For complete contents, please refer to the tapes.

 

TAPE/#

Speaker

Comments

TAPE 88, A

003

Chair Westlund

Opens the informational meeting and asks staff if they have any announcements.

INFORMATIONAL MEETING

010

Berkobien

Gives an explanation of the information presented by staff at the dais. (EXHIBIT A).

016

Chair Westlund

Introduces the witnesses and calls them to the dais.

025

Pat Gibford

Introduces herself presents her testimony (EXHIBIT B) and begins her presentation.

093

Rep. Monnes Anderson

Asks for a definition of what the 30-69 means.

096

Gibford

Gives an explanation that it is the average per member per month for our Oregon Health Plan membership and elaborates.

103

Rep. Greenlick

Asks if that means the dispensing fee is less than two dollars per prescription.

106

Gibford

Responds yes and Continues presentation.

112

Chair Westlund

Asks if this if for Feb. 2003 or as of Feb. 2003 and asks if 98 percent of your drugs we formulary drugs then 1.95 percent were non formulary drugs, so you went through your prior authorization process.

132

Gibford

Responds yes and continues.

138

Rep. Tomei

Asks what class of drugs would those be.

143

Gibford

Comments that there are not mental health drugs in here and explains and continues.

172

Berkobien

Asks if there is an appeal process that you have to go through.

177

Gibford

Responds yes and usually it is the physicians and explains.

212

Rep. Kruse

Asks for the definition of PAR.

215

Gibford

Gives explanation that PAR is Prior Authorization Required

220

Rep. Kruse

Comments for clarification that you have to get prior authorization for formulary drugs and some other drugs on the list.  Asks if it is a different process.

223

Gibford

Responds no, and explains.

228

Rep. Kruse

Asks why is there then a generic drug on page two (EXHIBIT B) requiring prior authorization.

243

Chris Kirk

Introduces himself as the Medical Director for Mid-Valley Individual Physicians Association and responds to the question on page two of (EXHIBIT B).

261

Rep. Bates

Asks what was the process to make a choice on what was on and what was off by the pre-authorization required list.

308

Gibford

Comments that the decision process was multi-faceted and elaborates.

316

Rep. Bates

He noticed that you use a PBM (Pharmacy Benefit Manager) and yet you say a PBM doesn’t fill all the needs you have because they don’t have the relations between you and your physicians.

320

Gibford

Responds to some degree that is correct and elaborates.

329

Rep. Bates

Asks if someone wanted to approach you would they go through you or the PBM.

314

Gibford

Responds that they would go through the PBM.  Continues presentation.

331

Berkobien

Asks how your formulary compares with the drug class list that the state is using.

342

Gibford

Responds to the drug class list and end her presentation.

366

Kirk

Begins his presentation. (EXHIBIT C)

TAPE 89, A

110

Rep. Tomei

Curious about the remarks that some people choose not to go for rebates, could you explain.

113

Kirk

There are people in the industry that feel that the rebate strategy is un-ethical.

108

Rep. Tomei

Asks why they think it might be un-ethical.

111

Kirk

Responds and elaborates.

120

Rep. Merkley

Asks if this is just an overall strategy to reduce drug prices.

127

Kirk

Responds yes.

129

Chair Westlund

Makes comments about pharmaceutical rebates.

135

Rep. Merkley

Does the rebate come as a check or as a discount on the bill.

140

Kirk

Responds that they will give you an estimated rebate and explains.

160

Berkobien

Comments about a national hearing that involved some of the larger PBM’s, getting rebates themselves and sharing with their consumers but not wanting to say how much they were getting themselves, are your PBM’s open with the type of medications that they might promote to you and how do you deal with that.

170

Kirk

Responds if their rebates are based on a PBM you need to watch them and elaborates.

177

Gibford

Adds to the comments.

182

Rep. Tomei

Asks the more drugs you use the higher the rebate.

186

Kirk

Responds yes.

188

Gibford

Also responds with an analogy.

192

Rep. Bates

Asks if they ever audit their PBM.

194

Gibford

Responds no, they have not.

196

Kirk

Responds that they have not found a company to audit.

212

Chair Westlund

Asks why don’t they use AEL to audit their PBM’s.

215

Kirk

Responds that they do on an ad-hoc basis and explains.

242

Rep. Kruse

Asks if AEL checks to make sure that you are getting the best rebates possible.

246

Kirk

Comments when advanced PCS gives us a recommendation we ask AEL for their advise.

249

Rep. Kruse

Asks if they save them money.

253

Kirk

Responds yes and elaborates.

 

Rep. Greenlick

Asks what the difference in price is.

 

Kirk

Responds approximately 1 dollar per pill.

291

Rep. Merkley

When you said that they settled for 5 million are you talking about a rebates of which you would have gotten a share or that’s a payment that is completely independent from the rebates.

293

Kirk

Comments no, they would not have seen a dime of that and elaborates.

304

Rep. Merkley

Comments that you mentioned the clause you use and is it an unusual provision and will they allow you to do that again.

313

Kirk

Responds that he does not know and continues.

381

Berkobien

Asks if they use pill splitting.

386

Kirk

Comments that they do not have a formal policy on that but have made it an educational piece.

394

Berkobien

Can you ball park the costs in pill splitting if you did do a mandatory policy.

402

Kirk

Makes comments about pill splitting if it was mandatory.

TAPE 88, B

007

Vice Chair March

Comments that there are some drugs that do qualify for pill splitting.

011

Kirk

Comments that, that is exactly right and explains that they have material on that fact and continues presentation.  (EXHIBIT C)

065

Rep. Greenlick

Asks if he did anything in his education and community in unnecessary prescriptions of antibiotics and etc.

071

Kirk

Responds that they have not found an opportunity there yet and comments about academic detailing.

076

Rep. Greenlick

Comments that it has not proven to be do effective when you evaluate it.

079

Kirk

States that it made an impact and continues.

082

Rep. Greenlick

One way is to look at the prescription utilization rates, have you done that.

088

Kirk

Responds whether or not they have looked at those rates and give examples.

102

Gibford

Comments that we have done some sorts of those things and explains.

120

Rep. Tomei

Asks how they handled the incident discussed.

122

Kirk

Responds that they have not done that yet and explains.

137

Rep. Tomei

With something not on the formulary do the customers have to pay for that themselves.

149

Berkobien

Can you speak generally about how the OHP formulary cost compare to some of the commercial products.

151

Gibford

Responds that it is difficult to compare and makes general comments about why.

164

Rep. Tomei

Would it be safe to assume that most of the population is older..

169

Gibford

Comments no, that most on Medicaid are in their 20’s.

172

Vice Chair March

Reiterates the question to make more clear and asks what would cause the difference in the OHP population and the commercial.

177

Gibford

Responds with an educated guess.

206

Kirk

In summary says in trying to control the pharmacy costs and having worked for 5 states at a time, the local relationships in Salem make a difference and it really does work.

222

Vice Chair March

Calls meeting to a close and adjourns 4:30 pm

 

 

EXHIBIT SUMMARY

 

A – Informational, prepared material, staff 2 pp

B – Informational, prepared testimony, Pat Gibford, 38 pp

C – Informational, prepared testimony, Chris Kirk, 19 pp