E-DRUG: US States Creating Their Own Plans to Cut Drug Costs
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[The drug costs debate in the USA is becoming serious. Maybe some
E-druggers can help set up Essential Drug Programmes for the USA?
From the New York Times:
Copied as fair use. NN]
April 23, 2001
US States Creating Their Own Plans to Cut Drug Costs
By ROBERT PEAR
WASHINGTON, April 22
US States are methodically creating
and expanding programs to help low-income elderly
people buy prescription drugs, even as Congress
appears to be floundering in efforts to add drug
benefits to Medicare.
Some states, like Pennsylvania, use state money to pay
part of the cost of each prescription. Some, like
California and Florida, have passed laws limiting the
prices that pharmacies can charge elderly customers. A
few, like Michigan and Missouri, have created tax
credits to offset the amounts spent on prescription
drugs.
Other states, including Iowa, New Hampshire,
Washington and West Virginia, have created buyers'
clubs or purchasing cooperatives to help low-income
elderly people obtain drug discounts.
Two states, Maine and Vermont, have recently received
permission from the federal government to use their
Medicaid programs to provide drug discounts to tens of
thousands of elderly and low-income people who would
not otherwise qualify for Medicaid. Maryland plans a
similar program under a bill signed on Friday by Gov.
Parris N. Glendening.
And various states in the Northeast and the South are
banding together to negotiate discounts from drug
manufacturers. Five states in the Northwest are
considering similar joint efforts.
Margaret H. Kuntz, a 71-year-old retired bookkeeper
who lives outside Pittsburgh, said Pennsylvania's
pharmaceutical assistance program was a lifesaver. She
pays a $6 co- payment for each of the drugs she takes:
Trimox, an antibiotic, for Lyme disease; Toprol, for
high blood pressure; Aciphex, for ulcers; Premarin,
for estrogen therapy; and Armour Thyroid tablets.
"It would cost me $400 to $450 a month if I had to pay
for these prescriptions on my own," Ms. Kuntz said. "I
would not be able to buy them all."
Pauline M. Dickson, 66, is equally enthusiastic about
Maine's program of low-cost drugs for the elderly and
disabled. "I don't know what I would do without it,"
she said.
Ms. Dickson, who lives in Hallowell, Me., said she
used to spend more than $50 a month on each of the
drugs she takes: Lipitor for high cholesterol, and
Cardene and Zestril for high blood pressure. Now, she
said, she spends only $43 a month in co-payments for
the three drugs together.
Richard Cauchi, a health policy expert at the National
Conference of State Legislatures, said, "It's quite
clear that states are learning from one another and
building on those experiences, rather than simply
copying what's been done in the past."
Illinois, Massachusetts and New York have doubled the
size of their programs in the last year, liberalizing
eligibility criteria and providing additional money
for subsidies. In New York, assistance is available to
individuals with incomes up to $35,000 a year and
couples with incomes up to $50,000.
Prof. Stephen Crystal, a gerontologist at Rutgers
University in New Jersey, said: "States are responding
to a vacuum in federal policy, the lack of
prescription drug coverage under Medicare. The state
programs are very popular for good reason. They are
meeting a real need. But in no way do they constitute
a national safety net. It's a spotty system that
exists in some places and not others."
At least 26 states have authorized some type of
pharmaceutical assistance program, Mr. Cauchi said. At
last count, he said, enrollment in the direct subsidy
programs totaled 1.1 million, with 70 percent of the
enrollment in six states: Pennsylvania (230,000
people), New Jersey (188,000), New York (165,000),
Massachusetts (71,000), Illinois (53,555) and Maine
(41,000).
Those figures do not include the tax credits provided
to more than 445,000 Missouri residents. Nor do they
include the experience of California, where experts
estimate that two million people may have bought drugs
with discounts authorized by state law.
The California program has no application forms, no
formal enrollment process and no record of
transactions. The state simply supplies price
information to pharmacies. Anyone with a Medicare card
can have prescriptions filled at the prices paid by
Medicaid, which receives discounts averaging 24
percent of the regular retail price.
Grace E. Cox, a 79-year-old retired nurse who lives on
a farm near Modesto, Calif., said: "It's most
commendable that the California Legislature saw fit to
pass this law, while in Washington members of Congress
diddle around and talk about the issue. It would be
nice if our law were extended nationally, so older
folks would not have to go to Canada or Mexico to get
cheaper medications."
Congress has held several hearings on Medicare drug
benefits this year, but is nowhere near a consensus.
Lawmakers disagree on the basic question of whether to
provide benefits to all Medicare recipients or just
those with the greatest financial need. Official cost
estimates for all proposals have shot up 30 percent in
the last year, confounding Congressional efforts to
set premiums, deductibles, co-payments and other
details of drug coverage.
Florida, Nevada, South Carolina, Washington and West
Virginia have the newest state programs, begun in the
last six months.
At least 10 states, Mr. Cauchi said, are financing
drug benefits for the elderly in part with money
received in the settlement of lawsuits against tobacco
companies: Delaware, Illinois, Indiana, Maine,
Massachusetts, Michigan, Nevada, New Jersey, New York
and Ohio.
State officials said they were taking action for the
reasons cited often by President Bush, members of
Congress and elderly people: Prescription drugs
account for a growing share of all health care
spending. Doctors are prescribing more drugs for the
elderly. The drugs can cure, treat and prevent deadly
and debilitating diseases, but new medicines usually
cost more than the ones they replace. So drug costs
have become a huge burden for many elderly people.
In establishing drug programs, states are performing
their traditional role as laboratories of social
policy, just as they pioneered the regulation of
workers' wages and hours in the early 20th century. In
the 1990's, many states found ways to provide health
insurance to their citizens. In recent years, most
states have passed laws to define patients' rights,
though Congress remains deadlocked on the issue.
Drug companies have been scrambling to keep up with
the proliferation of state activity.
Delegate Michael E. Busch, author of the new Maryland
law, the Senior Prescription Drug Relief Act, said:
"We had more pharmaceutical lobbyists down here this
year than you could shake a stick at. They were
everywhere."
The drug industry says it supports efforts to expand
access to prescription medicines, but it has filed
lawsuits challenging the programs in Maine and
Vermont.
D. Brock Hornby, chief judge of the Federal District
Court in Maine, blocked one part of the state program
that requires drug companies to subsidize discounts
for the uninsured. He said Maine was interfering with
interstate commerce, in violation of the Constitution,
by demanding rebates on drugs sold to wholesalers and
distributors in transactions consummated outside the
state.
"The Maine Legislature has sound reasons for wanting
to assist its uninsured citizens who must cope with
astronomical prescription drug prices," Judge Hornby
said. "But in our country, under our Constitution,
states cannot legislate outside their boundaries."
Other parts of the Maine program, under which the
state pays 80 percent of prescription costs for
individuals with annual incomes less than $15,448,
continue, unaffected by the court's ruling.
President Bush wants to build on the state programs.
He would provide them with $46 billion over the next
four years, while he and Congress consider major
changes in Medicare, including the addition of drug
benefits.
The Nevada program, Senior Rx, got off to a slow
start, but many Republicans see it as a potential
model. The state provides subsidies up to $480 a year
for residents 62 and older to buy drug insurance from
a private company, Fidelity Security Life Insurance of
Kansas City, Mo.
That was the approach favored last year by Republicans
in the United States House of Representatives: hiring
insurance companies to provide drug benefits to people
on Medicare.
A Nevadan can receive up to $5,000 a year in drug
benefits for premiums ranging from $75 to $98 a month.
The state will pay up to $40 of the monthly premium
for a person with low income. The Nevada Legislature
is considering proposals to increase the subsidy.
"We recognize that we need to make the program more
affordable," said Debbra J. King, the program manager
at the Nevada Department of Human Resources.
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