Prescriptions For Gov, And Private Sector

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http://www.wvgazette.com/section/News/2004111541?pt=0

 

By Scott Finn

Staff writer

 

If the House of Delegates passes a prescription drug resolution as expected today, West Virginia will take a leading role in the national effort to control drug costs.

Whether that’s a good thing depends on your point of view. But people on both sides agree on this — it could be a long time before West Virginians see any results.

 

The resolution passed the state Senate unanimously Monday, and is expected to breeze through the House today.

 

If it does, West Virginia would become the first state to try to obtain cheaper drug prices for both the state government and the private sector.

 

It also makes the state first to try to get the same deal on drug prices as some federal government agencies, according to the nonpartisan National Council on State Legislatures.

 

“We’re breaking new ground,” said Delegate Don Perdue, D-Wayne. “If we can do this, we could drive reform across the country.”

 

In letters to the state’s Pharmaceutical Cost Management Council, Phil Reale, state lobbyist for the drug industry’s lobbying group, warned of possible unintended consequences and even higher costs because “West Virginia has chosen to get out in front of the other states.”

 

The resolution does two things. It gives permission for the state to use the Federal Supply Schedule as the starting point for negotiations. Drugs on that list are often half as expensive as retail.

 

Researchers at Boston University’s School of Public Health estimated West Virginians could save more than $300 million a year with Federal Supply Schedule prices. But prices would probably be higher than that, because drug makers could argue for more money to cover costs like research and development.

 

The resolution also gives permission for the Pharmaceutical Cost Management Council to implement its strategic plan, submitted to the Legislature in September.

That plan recommends that all state drug purchases be done through a new Cabinet-level position, the Office of the Pharmaceutical Advocate.

 

The advocate would try to persuade other states to join West Virginia in negotiations (the state’s Public Employees Insurance Agency already has joined a multistate purchasing pool).

Purdue said several other states have expressed interest, including Illinois, Massachusetts and Maine.

 

Lots of states use their purchasing power to try to negotiate better deals for drugs. What makes this plan different is that private insurers and even people without insurance could join.

 

The Council wants to turn state government into a “virtual wholesaler” of prescription drugs. In theory, state officials would obtain cheap drug prices through negotiations. Then they would hire a wholesaler to pass those savings to the state’s local pharmacies.

 

Reale warned this could drive out other wholesalers, disrupt the market and end up increasing prescription drug prices.

 

In his letters, he also wrote that the plan could limit which drugs doctors prescribe their patients. A similar system in Australia makes patients wait up to a year before some drugs become available, he said.

 

The Pharmaceutical Council disagreed. “Interviews with leading physicians in Australia dispute this claim,” their September report says.

Even the plan’s supporters say it could be a long time before we see its results. House Speaker Bob Kiss, the force behind the proposal, predicted a delay of 12 to 18 months or more.

 

Kiss said there is a “better than 50/50 chance” the drug industry will sue to stop the proposal. “I’d like to get that lawsuit started sooner, rather than later,” he said.

Several well-known lawyers have expressed interest in representing the state government, Purdue said.

 

The drug industry might challenge West Virginia’s efforts as an unfair restraint of trade. Or they might say provisions that limit drug marketing are an unconstitutional restraint on free speech.

 

One example of what to expect comes from Maine, another small, rural state that passed a groundbreaking law four years ago, Maine Rx. Under the law, drug companies would have to lower prices or face hurdles that would make it harder to sell to Medicaid patients.

 

The drug industry challenged Maine Rx all the way to the U.S. Supreme Court.

The court did not overturn the law, but it didn’t approve it, either. It remained silent on a key question: whether federal officials had the power essentially to veto the program.

 

The Maine Legislature was pressured into backing off some of the toughest provisions of the law. It passed a scaled-down version, Maine Rx Plus, which provides discounted drugs for people earning up to 3 1/2 times the federal poverty level.

 

Still, Maine officials say Rx Plus customers save an estimated 10 percent to 25 percent on brand-name drugs and perhaps 60 percent on generics, according to the Web site Mainetoday.com.