Increased Prescription Drug Prices Spark State Actions
With HCFA estimating that spending on prescription drugs will reach $366 billion and account for 14% of total medical costs by 2010, the Boston Globe reports that two sides are forming on the debate over drug costs: those who see costs as a "threat" to patients without drug coverage, as well as to Medicare and Medicaid, and those who argue that rising pharmaceutical costs simply indicate a shift in how health care is provided. Explaining the latter argument, Frank Lichtenberg, professor of finance and economics at Columbia University, said, "It's a mistake to just focus on the costs [of drugs]. We need to also focus on the benefits -- increased longevity, improved quality of life, and reductions in total medical expenditures." He added, "It might make sense to spend more on drugs if it reduces total medical spending" (Aoki, Boston Globe, 3/28). Nonetheless, many states are considering legislation to control prescription drug costs. As part of our on-going monitoring of state actions on prescription drugs, the following round-up provides information from four states.
- Connecticut: The General Assembly's Insurance and Real Estate Committee voted 11-7 on March 27 in favor of a bill that would require insurers who refuse coverage of a non-formulary drug to pay for the medication for as much as 10 days while the denial is being appealed. The bill's opponents say it would "destroy" insurers' ability to control costs through the formulary system. Supporters, however, say the bill will prevent patients from becoming "destabilized" by being forced to "abruptly" change prescriptions if they switch health plans or if their insurer's formulary is changed (Levick, Hartford Courant, 3/28).
- Illinois: As part of a bill on tobacco settlement spending, the state House voted March 26 to appropriate $70 million for a program that subsidizes drug costs for low-income families and seniors. The bill's prospects in the Senate, however, are "uncertain." Gov. George Ryan (R) has proposed spending $105 million in tobacco settlement revenue on the program (Biesk, Chicago Tribune, 3/27).
- Louisiana: The Pharmaceutical Research and Manufacturers of America is "secretly behind" a print advertising campaign "slamming" a state proposal to require state authorization before doctors could prescribe "certain high-cost drugs" to Medicaid patients, the Baton Rouge Advocate reports. The full-page newspaper advertisement, published under the logo "Medicines Work for Louisiana," argued that the proposal would keep Medicaid patients from receiving "cost-effective medicines" and increase emergency room and hospital visits. The plan, which officials say could save the state $35 million annually, is expected to be considered during this legislative session and is supported by Gov. Mike Foster (R) (Shuler, Baton Rouge Advocate, 3/27).
- Massachusetts: Under the Prescription Advantage Program, a new state program scheduled to begin April 1, seniors and some disabled people may purchase prescription drug coverage on a sliding scale with a maximum premium of $82 per month. The state signed a $201 million contract on March 27 with pharmacy benefits manager Advanced PCS, which will operate the program. State health officials expect to have 14,000 people enrolled by April 1 (Powell, Boston Herald, 3/28).
