by Anne Krishnan, Staff Writer
Rob Thompson thinks that the combined clout of about 3 million state
employees and low-income residents could make a difference in the price
of prescription drugs in North Carolina.
His
consumer advocacy group is asking the state to pool its buying power
with uninsured citizens so that people without health coverage, as well
as taxpayers, can save money.
National
spending on prescription drugs more than tripled between 1995 and 2004,
according to research by the Center for Studying Health System Change
in Washington.
"It's
absolutely critical that we figure out a way to lower the cost of
prescription drugs for the sake of state government and for consumers
out there," said Thompson, a lobbyist for N.C. Public Interest Research
Group, or NCPIRG.
NCPIRG
proposes a program that would pool the resources of the state Medicaid
and employees' health plans with patients who have income less than
three times the poverty level but who don't qualify for Medicaid.
Private insurers also could opt in. The group would negotiate directly
with drug companies to get lower prices for its members.
"It
just makes sense," said Adam Searing, director of the advocacy group
N.C. Health Access Coalition. "You can buy paper towels cheaper at
Wal-Mart because Wal-Mart buys in bulk. Why not buy drugs cheaper that
way, as well?"
The
concept is already in effect on the federal level, where the government
negotiates directly with drug companies to get the best rates for
veterans, government employees and retirees. About 500 state and county
agencies in North Carolina also have teamed up with the Minnesota
Multi-State Contracting Alliance for Pharmacy to negotiate better
prices.
What's
new is NCPIRG's proposed inclusion of the uninsured. Although private
health insurers, state agencies and the federal government all
negotiate lower rates for their members' prescriptions, patients
without health insurance pay the full retail price for medicines at
drugstores.
"When
you're uninsured, you're completely at the mercy of the people who set
the prices," said Chapel Hill Democrat Rep. Verla Insko.
On
average, the full price of drugs in Raleigh is 58 percent higher than
what the federal government pays for the same drugs, according to an
NCPIRG report released last week. The difference ranged from 31 percent
for depression treatment Lexapro to 165 percent for Synthroid, which
treats thyroid disorders.
It's
hard to tell how many states have bulk purchasing programs for state
agencies, employees or the uninsured. At least four, Maine, Illinois,
Hawaii and Georgia, have pooled programs and several of those existing
or proposed plans include uninsured citizens.
But
even supporters of a drug purchasing pool acknowledge that it would be
an uphill battle to persuade lawmakers to adopt a plan.
Last
year, Insko introduced a bill that would have combined purchasing by
the state departments of corrections, health and human services and
juvenile justice and the state employees' health plan. An outside
pharmacy benefit manager would have negotiated on behalf of the group.
The bill never made it out of committee.
"It
would take quite a bit of debate, quite a bit of resources on the parts
of the people who are actually going to do it," Thompson said. "We do
see it as something that's going to be a long-term fight to achieve."
The
pharmaceutical industry's powerful lobbyists and the importance of drug
companies to North Carolina's economy have been obstacles in getting
similar measures heard in the legislature, Thompson and Insko said.
But
the lobbying group for the pharmaceutical industry has no problem with
state bulk purchasing programs, as long as they're limited to that one
function, said Jan Faiks, vice president of governmental affairs and
law for the Pharmaceutical Research and Manufacturers of America. The
industry objects when states specify preferred drugs, mandate discounts
and take on other roles Pharmaceutical Research and Manufacturers of
America considers to be government price controls, she said.
"The
more government gets involved, the less capital there is in the
industry" and the quicker companies will reduce their investments in
research and development, Faiks said.
But
as health-care expenses continue to rise, financial pressures may force
the state to look seriously at cutting costs -- even at the expense of
the drug industry, said Searing, who expects that legislators will face
a budget deficit next year. "Drug costs are a place where there has
traditionally not been much cost-cutting, in contrast to most areas of
the health system," he said. "They're going to have to come to the
table like everyone else."
