OHA outlines ArrayRx/OPDP operations and Medicaid constraints; board presses for single-PBM options to improve access

After the staff technical briefing, the board heard a joint presentation from Oregon Health Authority staff on ArrayRx, the multistate cooperative procurement, and on Medicaid pharmacy policy.

Trevor Douglas, OHA director of pharmacy policy and programs, described the difference between the statutory Oregon Prescription Drug Program (OPDP) and ArrayRx, which he said is a multistate cooperative procurement (not a separate legal entity). Trevor said ArrayRx has grown rapidly and now covers more than 890,000 lives across participating jurisdictions; OPDP directly leverages ArrayRx contract vehicles to serve roughly 300,000 Oregon lives. He told the board that, for 2022–24, pass-through pricing and rebate pass-through under ArrayRx/OPDP yielded savings attributable to the program that he estimated at about $120 million for Oregon and larger aggregate savings nationally.

Trevor stressed ArrayRx contract principles: public-sector oversight, full pass-through of manufacturer-derived revenues attributable to member claims, prohibition on spread pricing in contract terms, auditability, and a third-party market assessment provision to reopen pricing negotiations if needed. "We require a 100% of all manufacturer-derived revenues that are attributable to any of our members' pharmacy claims to be passed through," he said.

Dee (Deborah) Weston, OHA pharmacy program policy adviser, explained Medicaid requirements and differences in reimbursement. She said states that participate in Medicaid must provide a pathway to coverage for medically accepted indications of rebatable drugs to receive federal match and federal Medicaid rebates; those rebate amounts are confidential and are invoiced and managed by OHA. Dee also described distinctions between fee-for-service and coordinated-care-organization (CCO) reimbursement: fee-for-service programs must use acquisition- or cost-based reimbursement (including periodic surveys to set acquisition costs and dispensing fees), while CCOs commonly use commercial-style reimbursement formulas.

Board members asked whether aligning purchasing (for example, a single PBM or statewide preferred drug list) could substantially increase savings and improve pharmacy access, especially in rural and frontier areas. Trevor and Dee said some states have moved toward consolidated models (they cited Washington and other states as examples) and that a statutory or contractual pathway exists for OPDP/ArrayRx to serve more lives if state entities elect to participate; Trevor estimated that including Medicaid could move coverage from tens of thousands to roughly 1.2–1.3 million lives covered under OPDP-like arrangements. Dee warned of trade-offs: premium-tax impacts, federal rules governing Medicaid reimbursement and rebates, potential reductions in fee-for-service protections (such as acquisition-cost reimbursement for 340B entities), and political or contractual resistance from CCOs that value local flexibility.

John Murray and other board members emphasized pharmacy access problems in Eastern Oregon and urged PDAB to continue discussing consolidation and transparency options. Trevor said ArrayRx and OPDP oversight includes a steering committee that meets weekly and that the master administrative contract is currently administered by Moda Health under the ArrayRx master agreement. Trevor and Dee both offered to return for future meetings and to provide more detailed data on membership, covered lives, and specific savings analyses.

Why it matters: The discussion tied the board's affordability work to procurement and Medicaid policy choices with significant implications for statewide purchasing power, pharmacy viability in rural areas, and how rebate revenue and reimbursement rules affect access.