Drug Companies Would Offer Reduced-Cost Medications to Seniors Under Iowa Governor’s Plan

Iowa Gov. Tom Vilsack (D) on Aug. 5 proposed legislation that would require pharmaceutical companies to offer drugs at reduced costs to seniors similar to the discounts given under the state's Medicaid program, the Des Moines Register reports. In proposing the legislation, Vilsack acknowledged that the Iowa Priority program, intended to pool seniors so that the group could negotiate lower prices from pharmaceutical companies, had failed, the Register reports. Only three of the country's 20 major pharmaceutical companies had agreed to participate in the program. Under the new program, drug companies would be required to extend the 15.1% discount on brand-name drugs and 11% discount on generics offered to Medicaid beneficiaries to seniors in the state. Vilsack said, "They wouldn't have a choice. It wouldn't be voluntary. It would be required if they wanted to sell their prescription drugs in our state." The drug companies would finance the discounts, and the plan would not "cost state government anything," the Register reports. Vilsack added, "Since the pharmaceutical companies will not cooperate, and Congress and the administration don't appear to be able to reach consensus and agreement, it is up to the states to take action."

'Cautious Optimism and Skepticism'
Vilsack's plan is similar to a Maine program that the pharmaceutical industry is challenging in the U.S. Supreme Court. Some Iowa lawmakers are "skeptic[al]" of Vilsack's proposal, and drug companies offered "warnings ... that the plan could hurt the state." Bruce Lott, a spokesperson for the Pharmaceutical Research and Manufacturers of America, said, "We're disappointed that the governor is pursuing a program that we believe violates federal law and that could have dire consequences for Medicaid patients." He added, "This program would hold Medicaid patients hostage in order to provide discounts for non-Medicaid patients." State Senate Majority Leader Steward Iverson (R) said the state should wait until the Supreme Court issues a decision on the Maine program. He said, "I think before we start jumping here, we need to take a little better look at things. I'm always a bit skeptical when we say we're going to mandate that somebody has to do this or that" (Okamoto, Des Moines Register, 8/6).