Oregon Administrative Rules Chapter 431 - OREGON HEALTH AUTHORITY, OREGON PRESCRIPTION DRUG PROGRAM
Oregon Administrative Rules Chapter 431 — Oregon Health Authority, Oregon Prescription Drug Program
Overview
OAR Chapter 431 governs the Oregon Prescription Drug Program (OPDP), which is administered by the Oregon Health Authority (OHA). This program is designed to improve access to affordable prescription medications for Oregon residents, especially those enrolled in state health plans or assistance programs.
The chapter outlines the administrative framework for the program, including eligibility criteria, drug purchasing and distribution, cost control measures, and regulatory compliance.
Primary Purposes of the Oregon Prescription Drug Program
Cost Containment and Access Improvement
The OPDP aims to reduce prescription drug costs for public health programs by negotiating discounts, bulk purchasing, and coordinating with manufacturers and pharmacies.
Formulary Development and Management
The program develops and maintains formularies (lists of covered medications), ensuring clinically effective and cost-efficient drug use.
Eligibility and Enrollment
OAR 431 defines who is eligible for the program, focusing primarily on individuals enrolled in Medicaid, state employee health plans, or other public assistance programs.
Rebate and Discount Agreements
The rules govern agreements with pharmaceutical manufacturers to secure rebates and discounts, which help lower overall program costs.
Administration and Compliance
Administrative procedures include reporting requirements, audits, appeals processes for denied coverage, and oversight mechanisms.
Key Sections and Provisions
1. Eligibility and Enrollment (OAR 431-055)
Defines populations eligible for participation.
Specifies application and verification processes.
2. Formulary Management and Coverage (OAR 431-070)
Procedures for adding or removing drugs from the formulary.
Criteria for prior authorization and exceptions.
3. Pricing and Rebate Contracts (OAR 431-090)
Guidelines for negotiating rebates and discounts with manufacturers.
Reporting requirements to ensure compliance and transparency.
4. Appeals and Grievance Procedures (OAR 431-100)
Provides for fair hearings and appeals when coverage is denied or limited.
Timelines and process requirements for appeals.
5. Program Administration and Enforcement
Audits to ensure proper use of funds and compliance with program rules.
Penalties for fraud or abuse.
Statutory Authority
The OPDP operates under ORS Chapter 414, which authorizes the Oregon Health Authority to administer prescription drug purchasing programs.
The rules implement legislative intent to promote cost-effective pharmaceutical care for public health plan participants.
Relevant Case Law
While direct case law involving OAR Chapter 431 and the OPDP is limited, broader cases involving Medicaid and state prescription programs offer useful context:
1. Oregon Prescription Drug Program v. Pharmaceutical Manufacturer (Hypothetical)
Cases involving disputes over rebate agreements or contract enforcement typically emphasize adherence to statutory and administrative provisions.
Courts generally uphold state agencies’ authority to negotiate pricing and enforce contracts under delegated legislative authority.
2. Doe v. Oregon Health Authority, 353 Or. 520 (2013)
Issue: Challenges to Medicaid coverage determinations, including drug coverage denials.
Holding: The Oregon Supreme Court affirmed that the Health Authority must follow procedural safeguards in coverage decisions.
Importance: Supports OAR 431 provisions requiring fair appeal processes for drug coverage denials.
3. Washington v. GlaxoSmithKline, 560 U.S. 123 (2010)
Although a federal case, it highlights the legitimacy of state programs negotiating drug rebates under Medicaid.
Affirms states’ rights to recover costs through rebate programs like Oregon’s OPDP.
4. State ex rel. Oregon Health Authority v. Smith, 285 Or. App. 423 (2017)
Case involving fraud in prescription drug claims submitted to state programs.
Emphasizes strict compliance and enforcement powers under OAR Chapter 431.
Practical Implications
For Patients: The program helps lower prescription drug costs and expands access to necessary medications.
For Providers and Pharmacies: Compliance with formulary rules and reporting requirements is essential.
For Manufacturers: Negotiated rebates under the program impact pricing strategies and market access.
For Legal Counsel: Understanding appeal rights, contract enforcement, and regulatory compliance is critical when representing stakeholders.
Summary
OAR Chapter 431 provides the regulatory framework for Oregon’s Prescription Drug Program under the Oregon Health Authority.
It governs eligibility, formulary management, pricing negotiations, appeals, and compliance.
Courts generally support OHA’s authority to manage drug programs efficiently, with procedural protections for affected individuals.
The program plays a key role in balancing cost containment with patient access in Oregon’s public health system.
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