Friday, December 27, 2002

Coalition pushes for discounts on drugs

Plan would benefit uninsured Ohioans

By Debra Jasper
Enquirer Columbus Bureau

COLUMBUS - Backers of a plan to drastically cut prescription drug prices for millions of uninsured Ohioans are giving lawmakers one last chance to act before they take the issue to voters.

Until now, legislators have ignored pleas from the AARP, United Way, the Ohio Council of Churches and more than a dozen other organizations that want the state to buy prescription drugs in bulk at big discounts and pass the savings onto consumers.

But on Thursday, those groups stepped up the pressure by filing petitions with the state - signed by 143,031 people - in favor of a proposed discount drug program.

  The Coalition for Affordable Prescription Drugs cites the following to make the case for passage of the Ohio Prescription Drug Fair Pricing Act.
• More than 2.2 million Ohio residents do not have prescription drug coverage.
• Ohio residents paid about $4.25 billion to brand name drug companies.
• If these drugs were given the discounted prices given to certain federal agencies, the brand name drug companies would receive payments of $2.7 billion, saving Ohio residents about $1.54 billion.
• Americans pay 30 percent to 70 percent more than Canadians and Mexicans for the same prescriptions.
• U.S. prescription drug spending rose nearly 17 percent in 1999 (about $99.6 billion) and analysts predict double-digit increases in spending per year until 2010.
• Pharmaceutical industry is earning profits of 18.3 percent compared to an average profit of 5 percent for other industries.
If 97,000 of those signatures are certified as valid registered voters, lawmakers will have four months to pass the Prescription Drug Fair Pricing Act, a bill written by minority Democrats that advocates say will lower drug prices for the uninsured by as much as 50 percent.

"In the past, the big drug companies have done everything in their power to derail this effort and keep their profits sky high," said Cathy Levine, executive director of the Universal Health Care Action Network of Ohio. "In the name of the 143,031 people who have signed these petitions, we call on the drug companies to stop their obstructionism and work with us on behalf of Ohio."

If lawmakers refuse to pass the measure, the Coalition for Affordable Prescription Drugs - made up of Ms. Levine's organization and 19 other non-profit groups - will have three more months under Ohio law to collect the additional 97,000 valid signatures they need to put the issue on the ballot.

Ms. Levine said the discount drug program would not cost taxpayers more money because administrative costs and other expenses would be taken from drug rebates.

"There are 2.2 million Ohioans, many of them who are not elderly, who lack prescription drug coverage," she said. "Our proposal would help every one of them."

Despite the strong lobbying effort, majority Republican legislators aren't convinced a bulk-purchasing bill will be on the table when the General Assembly reconvenes in January. The state faces a budget deficit that could be as much as $4 billion next year. House Speaker Pro Tempore Gary Cates, R-West Chester, said most lawmakers aren't in the mood to increase spending.

"Anytime you bring a new program out, there's always unknown or unexplained costs down the line," he said.

Joe Andrews, spokesman for Gov. Bob Taft, said the governor believes Congress should take responsibility for making prescription drugs more affordable. Congress has struggled to get bipartisan support for a prescription drug benefit for Medicare recipients. Mr. Taft supports the Golden Buckeye Card, which offers 10 to 20 percent discounts to Ohioans who are 65 or older.

Mr. Andrews said the governor is concerned that any bulk-buying program would end up in court, as it has in Maine. The Pharmaceutical Research and Manufacturers Association (PhRMA) is suing that state over a program to lower prescription drug costs for about 325,000 residents without insurance.

The program saved consumers money by having the state negotiate on their behalf with drug manufacturers for lower prices. Under the Maine law, drug companies that refused to provide rebates could face reduced sales in the Maine Medicaid Program.

PhRMA has challenged that law and the U.S. Supreme Court is expected to hear arguments in the case next month. In addition, a federal appeals court on Wednesday struck down another ground-breaking Maine program that forced drug makers to give discounts of 18 percent to 25 percent to low-income people.

Emily Foster, spokesperson for PhRMA, said drug manufacturers oppose such plans because they erode the ability of pharmaceutical companies to pay for needed research.

"As far as PhRMA is concerned, these sorts of laws are, in effect, price controls," Ms. Foster said. "Price controls are bad economic policy. They don't work, and they are government intrusion into free markets."

Ms. Levine and other members of the Coalition for Affordable Prescription Drugs contend that drug companies won't lose money in an Ohio bulk-purchasing program because they will sell more drugs.

Besides, she said: "They claim they charge exorbitant prices in order to pay for research, but research and development takes 16 percent of every dollar they take in. Thirty-three percent of what every one of us pays on prescriptions is spent on marketing."

"They hike their prices for any reason they want to, so, yes, they may use this as an excuse to hike their drug (prices)," she said.

Dale Butland, spokesman for the coalition, said he is confident that the proposed drug rebate program in Ohio is constitutional.

"What we are proposing here is not a radical new idea. The U.S. government is already doing this," he said. . "All we are suggesting is Ohio do the same thing, negotiate lower prices and pass those savings on to consumers."


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