Drug card is touted to help uninsured
Omaha World - Herald (Nebraska)
February 16, 2007 Friday

By negotiating more aggressively for lowerpriced drugs, Nebraska state government could save enough money to offer a prescription drug card to uninsured residents, officials of the state AARP said Thursday.

Such a card would enable low- and middle-income Nebraskans to buy prescriptions at the same price that the state pays for drugs in the Medicaid program for low-income children, the disabled and the elderly.

"This seems to me like the most common-sense measure the Legislature will consider this year," said State Sen. Steve Lathrop of Omaha, who introduced the drug card proposal, Legislative Bill 699, on behalf of the state AARP.

The proposal is opposed by drug manufacturers, including Pfizer, Wyeth and Merck.

Marjorie Powell, senior assistant general counsel for the Pharmaceutical Research Manufacturers of America, testified on behalf of the drug companies. She said the AARP plan wouldn't work and would potentially violate federal regulations.

"It sounds very good in simple terms," Powell said, "but the devil is in the details, and this one's details just don't work out."

She said other states have had more success developing drug assistance programs with the voluntary participation of drug companies.

Connie Benjamin, executive director of AARP Nebraska, said a December survey indicated that more than half the group's members worried that they would not be able to pay for prescription drugs within the next two years. She said 84 percent said they supported a state prescription drug discount program.

LB 699 would require the state to implement a preferred drug list, giving it clout to negotiate lower drug prices from pharmaceutical companies.

Under a preferred drug list system, the most effective drugs available at the lowest cost are identified as the first preference for prescriptions written through Medicaid. Forty-four states already use preferred drug lists to help control costs.

The bill also would enable the Nebraska Medicaid program to join a multistate drug purchasing pool, further increasing its negotiating clout.

Brian Elms, an AARP official in Washington, D.C., said other states have saved considerably by using preferred drug lists and purchasing pools.

Florida saves $200 million a year on prescriptions with a preferred drug list, and Nevada has reduced its expenditures by an estimated $4.3 million per year by participating in a purchasing pool, Elms said.

Lathrop estimated that Nebraska could trim about $2 million a year from its $60 million annual Medicaid drug costs by using the purchasing pool and preferred drug list.

That would be more than enough to pay the estimated $1 million start-up cost for a drug card program, Lathrop said. The cards would be issued to Nebraskans earning up to 300 percent of federal poverty levels, about $60,000 for a family of four.

Gary Cheloha, a pharmacist and an administrator for Nebraska's Medicaid program, said Nebraska has reduced Medicaid prescription costs by using a less restrictive "prior authorization" program that has slowed the use of certain popular brand-name drugs.

The state is about to sign a contract with a consultant that will investigate whether more could be saved by using a preferred drug list.

Powell said that the administrative costs of developing a preferred drug list are high and that it essentially works by making it more difficult for physicians to prescribe brand-name drugs to poor people.

She added that pharmaceutical companies already offer drugs at low or no cost to people in need. Pharmaceutical companies aided 22,500 Nebraskans with drugs during the past 18 months under the Partnership for Prescription Assistance.