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Drugmakers’ price-cap claims are ‘Chicken Little,’ state official says

The pharmaceutical industry and patient groups are opposing a price cap proposal headed for lawmakers, prompting a prominent state staffer to speak out
Ralph Magrish, executive director of the Oregon Prescription Drug Affordability Board, said the pharmaceutical industry is spreading misinformation about proposed price caps at the board's April 17, 2024 meeting. | SCREENSHOT
April 30, 2024

As the state of Oregon moves toward capping the prices of some prescription drugs, a bureaucrat tasked with shepherding the proposal is lashing out at “fear mongering” by the powerful pharmaceutical industry and its “proxies.” 

Ralph Magrish, executive director of the Oregon Prescription Drug Affordability Board, made the remarks during the April 17 board meeting. He didn’t single out any group by name, but his comments were clearly directed at patient advocacy groups that often align themselves with the pharmaceutical industry while receiving significant funding from them. 

During his presentation, Magrish said he was addressing “those who have chosen to stand with manufacturers in this issue … and sing the songs of fear and tears and doom and gloom.” He added, “We invite you to join us in singing from our sheet of music about hope and meaningful changes.

“Why are so many people out there opposed to something that is intended to help protect Oregonians and our health care system?” Magrish said. He answered his own question, saying, “It starts with (drug) manufacturers, their trade associations, their proxies and those who choose to support a doom and gloom perspective on upper payment limits.”

Margrish’s comments come as the relatively new board considers capping the prices that the pharmaceutical industry can charge government and commercial health plans for certain prescription drugs. His remarks represented the latest in an increasingly combative back-and-forth between the pharmaceutical industry and the board, which is holding a series of public forums on drug prices as it develops a plan for price caps to share with lawmakers in September.  

If lawmakers adopt the plan when they convene next year, Oregon will join Colorado and Maryland, which are moving ahead with adopting price controls for increasingly costly prescription drugs. 

So far, no state has fully implemented a prescription drug price cap. The pharmaceutical industry trade group PhRMA has fought against drug price limits, including in court, arguing the untested idea will hurt patient access and leaves out the role of pharmacy benefit managers, companies that negotiate prices on behalf of insurers. 

The Oregon Prescription Drug Affordability Board will submit a plan for price controls on prescription drugs to the Legislature in September.

PhRMA has aggressively criticized Oregon’s board as unfit for the complexity of its work. 

“The Oregon board’s process has not shown that its work will benefit patients,” Reid Porter, senior public affairs director for national pharmaceutical manufacturer trade group PhRMA, told Oggys Online in an email. 

In a letter in February Porter called on the state to pause its work saying the board had failed to properly consider issues including “health equity, burden of disease, input from patients and caregivers, and relevant pricing and commercial data.”

Earlier, in an email to Oggys Online, Porter suggested that the board was being used by advocacy groups backed by insurance companies that “are pushing states to adopt these flawed price-setting schemes that are meant to fix the health care system but avoid dealing with insurers or middlemen in the supply in any way.” 

Role of patient groups

Leaders of patient advocacy groups, which often receive significant financial backing from drugmakers and often ally with the industry , have criticized the board for not doing enough to solicit their feedback. They’ve also called the board’s affordability reviews of drugs flawed and raised alarms that the price caps will increase the costs of other medications, echoing industry arguments. 

Magrish did not respond to an interview request to clarify who he was referring to. Jason Horton, spokesperson for the board, told Oggys Online in an email that  “the remarks were focused on statements and reports issued by manufacturers.”

According to public records showing notes of an interview in 2022 with state auditors, Magrish complained that, “Pharma lobbyists have an endless and infinite bench of resources and that can be difficult to go up against.”

State Rep. Rob Nosse, a Portland Democrat who chairs the House health committee, told Oggys Online that it was clear to him who Magrish was referring to. 

“There’s a whole ecosystem,” he said. “It's not just PhRMA and the drug manufacturers that lobby us about prescription drug prices and making medications available, there are all these patient advocacy groups that are out there.”

He noted that much of the funding  nonprofit groups receive from  the pharmaceutical industry is not publicly reported. 

“It literally is Chicken Little, the sky is falling. It’s a fairy tale trying to create a hysterical or mistaken belief that disaster is imminent should upper payment limits occur.”

 “Elephant in the room’ 

Magrish’s roughly 30-minute presentation to the board on April 17 was notable for its full-throated embrace of a policy proposal that the appointed board would submit to lawmakers as well as for its confrontational tone.

The board staffer began his presentation by addressing what he called the “ever growing larger and larger elephant in the room,” which he said was the “swirl of misinformation and fear mongering” in relation to the price cap proposal. He said for years the pharmaceutical industry has capitalized on making the market “so complex and so opaque.”

Magrish dismissed pharmaceutical industry arguments that pharmacy benefit managers, drug supply middlemen companies, have an outsized role in prices. The real cause, he said, are drug manufacturers’ rebates and patient assistance programs that he said distort the market.

Colorado earlier this year launched a process to place a price cap on rheumatoid arthritis drug, Enbrel. Critics, including patient groups, have argued that drugmakers will shun Colorado if the state carries through on the plan. 

Magrish called that argument a “false choice” and said that if a drug maker threatened to pull out of Oregon over a price cap the board should consider recommending to the Legislature that the state divest from the company.  

Magrish specifically cited a report criticizing price limits that has been circulated in Oregon by a subsidiary of Johnson & Johnson. The report, obtained by Oggys Online through Oregon Public Records Law, states that the price limits “focus solely on  the price of a drug instead of the entire  drug supply chain ecosystem, they may have long-term negative impacts across benefit design, patient access, pricing,  contracting and future innovation.” 

“Oregon should focus on policies that benefit patients rather than an unproven approach that could create barriers to lifesaving medicines,”

“It literally is Chicken Little, the sky is falling,” Magrish said. “It’s a fairy tale trying to create a hysterical or mistaken belief that disaster is imminent should upper payment limits occur.” 

Johnson & Johnson did not immediately respond to a request for comment from Oggys Online. 

Public records obtained by Oggys Online show that Jonathan Frochtzwajg, public policy manager for Cascade AIDS Project, provided Magrish with the report. Frochtzwajg declined to comment. 

Asked about Magrish’s comments, Porter argued that the state employee “distorted facts and demonstrated significant anti-industry bias, raising additional concerns about the ability of the board to complete their charge in a factual and neutral manner.”

“Oregon should focus on policies that benefit patients rather than an unproven approach that could create barriers to lifesaving medicines,” he said. 

The board will hold one more in-person forum on drug prices in Bend on Tuesday from 6 p.m. to 8 p.m. It’ll hold two more meetings online on May 8 and 14. Details are on the board’s website

You can reach Jake Thomas at [email protected] or via @jakethomas2009.