Illinois Lawmakers Introduce Plan to Encourage Generic Drug Use, Require Drug Copayments

In response to rising Medicaid drug costs, Illinois lawmakers are considering a proposal to encourage physicians to prescribe generic drugs to and to require prescription drug copayments for Medicaid beneficiaries, the Chicago Tribune reports. According to the Tribune, rising drug costs factor largely into the state Medicaid budget's predicted $270 million shortfall for FY 2002, as drug costs for the program are rising by at least 15% per year. Officials estimate that the state could reduce costs by "at least" $50 million per year, or 5%, by encouraging generic drug use and requiring copays. The plan, sponsored by state Sen. Frank Watson (R) and Rep. Jay Hoffman (D), would require doctors to obtain state approval prior to prescribing brand-name drugs for "common conditions for which numerous generic substitutes exist." For example, physicians would be required to prescribe generic antibiotics, anti-inflammatories, antihistamines or anti-ulcer treatments. Watson said, "It doesn't take a big shift in the prescribing habits of physicians in this state to save money. These are not necessarily life-saving drugs. Why not start out on a generic drug and then move to a brand name if necessary?" In addition, the proposal would require Medicaid beneficiaries to contribute an undisclosed amount for brand-name drugs. However, lawmakers said that Medicaid patients who cannot afford copays would be exempted, and generic drugs would not require a copay.

Drug Companies, Patient Advocates Oppose Plan
Drug companies call the proposal "ill-advised," saying that the newest brand-name drugs "do a good job" of preventing costly hospital or nursing home stays. In addition, consumer advocates say requiring prior authorization could "be dangerous" for patients with certain conditions. Randy Wells, executive director of the National Alliance for the Mentally Ill in Illinois, said, "The Watson-Hoffman proposal would impose restrictions that could prevent Medicaid patients from receiving new medicines. That's worse than shortsighted. It is medically and financially irresponsible." Drug industry representatives added that the state could further reduce costs by "educating doctors and cracking down on health care fraud." But Watson said the proposal does not aim "to be punitive and take things away. We're trying to hold down costs and we need to change the prescribing habits of the medical community." The Tribune reports that the state Department of Public Aid, which runs the Medicaid program, could enforce aspects of the proposal "at any time, without a vote of the full legislature." However, Gov. George Ryan's office requested proposals before the FY 2002 budget is finalized. Ryan has already "sliced" $60 million in Medicaid dispensing fees to pharmacists. Ryan spokesperson Dennis Culloton said, "We've taken the Watson-Hoffman report and Public Aid is folding this into their efforts to come up with recommendations for the governor on how to fill the $270 million Medicaid gap with which we are faced" (Japsen, Chicago Tribune, 5/14).