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Read Making a Killing

home / healthcare / in the media

Sacramento Bee
Feb 13, 2004

by Lisa Rapaport -- Bee Staff Writer

Bills target drug prices

The measures include helping patients and the state buy from Canada.
California lawmakers on Thursday introduced a package of bills designed to curb prescription costs, in part by leveraging bulk government purchases and in part by helping patients and state agencies buy medicine from Canada.

Dubbed the Affordable Prescription Drug Act of 2004, the proposals also give state lawmakers more oversight of drug spending in government health programs.

"This bill package is a prescription for relief from the high costs consumers and taxpayers are paying for prescription drugs," said Assemblyman Dario Frommer, D-Los Angeles, author of several of the bills. "It empowers patients and taxpayers to safely find the lowest prices possible for the medications they need."

The proposals come at a time when drug costs are taking a big bite out of government and household budgets.

California spent $2.9 billion for prescription drugs in the Medi-Cal program in the last fiscal year, a figure expected to reach $3.8 billion this year. The state's prison system spends more than $125 million each year on drugs.

The California Public Employees' Retirement System, the third largest purchaser of health care in the country, spends $700 million a year on prescriptions.

At the same time, consumers spend an average of $654 out of pocket on drugs every year.

"Prescription costs are an election year issue, and this package is clearly timed to help Democrats hold on to seats," said Jerry Flannagan, with the Foundation for Consumer and Taxpayer Rights. "That said, these are proposals that do have some potential to save money for the state and for patients."

All told, state agencies, private employers buying insurance and individuals in California spend $25 billion each year on prescriptions, Frommer said.

One bill he proposed, AB 1958, might take advantage of the bulk drug rates negotiated by CalPERS by allowing more state agencies to join that pool. Because bulk drug discounts are based on the volume of prescriptions filled, pooling several state health programs into a single bulk purchasing pool might lower the cost of drugs.

Another bill, AB 1959, by Assemblywoman Judy Chu, D-Monterey Park, would require CalPERS and other state health programs to share currently confidential drug contracts with the chairs of the Assembly and Senate budget committees. The bill is intended to help lawmakers guard against overspending.

In addition, AB 1960, by Assemblywoman Fran Pavley, D-Agoura Hills, would require prescription benefits companies that manage drug coverage for state programs to disclose to lawmakers the discounts and rebates they receive from drug companies for bulk purchases. That information, too, is currently confidential.

To prevent third-party vendors from buying lists of physicians' prescribing habits to use for drug marketing, another bill, AB 262, by Assemblywoman Wilma Chan, D-Alameda, would set up a "do not sell" list barring pharmacies from giving out information about doctors who have asked that their prescribing information be kept private.

As part of the package, lawmakers also expanded on proposals to buy Canadian drugs that were unveiled earlier this year. AB 1957, by Frommer, would have the state Board of Pharmacy set up a consumer Web site to help patients buy drugs from certified Canadian drugstores and could also have the state buy Canadian drugs.

Lawmakers also suggested two resolutions to Congress. They would ask the U.S. secretary of health and human services to certify that Canadian imports are safe, which could allow pharmacists in California to buy drugs from Canadian wholesalers.

Currently, federal regulators are discouraging California and several other states from purchasing drugs in Canada because they say the practice is unsafe and it violates federal law.

In addition, the lawmakers would ask Congress to repeal a provision in the Medicare reform bill passed last year that bars the federal government from negotiating prices for the new Medicare drug benefit.
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The Bee's Lisa Rapaport can be reached at (916) 321-1005 or lrapaport@sacbee.com

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