The sensational online headline “Rising prescription drug prices contributed to 49% jump in Oregon healthcare costs over 6-year period: report,” failed to reflect key facts regarding what health insurers and other middlemen truly end up spending on prescription medicine. While the Oregon Health Authority report that the story is based on raises good questions about spending in Oregon’s health care system, the report fails to explore all the factors driving health care costs in the state. That’s because, as the report itself accurately discloses, it lacks critical information about pharmacy rebates and patient utilization.

Insurers negotiate and receive steeply discounted prices on medicines in the form of rebates and other price concessions from pharmaceutical companies. The pharmacy costs reflected in the report would be significantly reduced if these savings were included.

Numerous publicly available resources show that pharmacy costs have not grown nearly as much as reported in this paper. For example, in 2020, CVS said net drug prices rose just 2.9% for their commercial clients. Express Scripts reported that their commercial client’s net drug prices increased by 4.0%.

While the report focuses on Oregon-specific spending increases from 2013-2019, national data from the same timeframe show that prescriptions remain steady at 14% of total health care expenditures and are projected to stay the same through 2028. That includes an estimated decrease of 0.2% in national retail spending on prescription drugs by 2028.

Oregon’s policymakers need comprehensive information to assess the true costs of medicines to the state, insurance companies and other middlemen, and patients. This includes capturing whether the savings are being shared with patients to help them pay less at the pharmacy counter.

Reid Porter

Porter is senior director of public affairs for PhRMA