Consumer Advocates Raise Concerns About Schwarzenegger Prescription Drug Discount Proposal
Gov. Arnold Schwarzenegger (R) this week plans to release a proposal to provide discounts of about 40% on prescription drugs for uninsured state residents, but consumer advocates have raised concerns because the plan "relies on voluntary participation" by pharmaceutical companies and "only covers the uninsured," the Orange County Register reports. Last year, Schwarzenegger vetoed several bills that would have legalized prescription drug reimportation for state residents (Hinch, Orange County Register, 1/5).
Under the prescription drug discount proposal, the state would establish a California Rx program to provide prescription drug discounts for state residents with annual incomes of less than 300% of the federal poverty level. The program would provide cards that participants could present to pharmacists, who would seek the lowest prices for medications through state or pharmaceutical company programs (California Healthline, 8/20/04).
Under the proposal, pharmaceutical companies would voluntarily negotiate three-year contracts with state health officials to provide the discounts. Schwarzenegger administration officials have said that almost all large pharmaceutical companies that sell prescription drugs in the state have agreed to participate.
Schwarzenegger spokesperson Ashley See said, "The importance of affordable prescription drugs for Californians is something the governor has repeatedly talked about. He said that he wants real savings for those in need in a way that doesn't violate the law."
However, consumer advocates, who support a proposal announced Monday by Democratic lawmakers, said that the governor's prescription drug discount proposal is inadequate.
"There's no hammer" to ensure that consumers pay less for prescription drugs, Steve Blackledge, legislative director for the California Public Interest Research Group, said.
Marilyn Ditty, executive director of South County Senior Services, said that the proposal likely would help only a small percentage of elderly state residents because health insurers would continue to pay the same prices for prescription drugs. "We're only chipping away at the problem," she added.
Consumer advocates also said that pharmaceutical companies, which do not have to reveal their prices, could provide discounts on inflated prices. In addition, the 40% discount under the proposal would not apply to all medications sold by pharmaceutical companies because "companies could charge full price for some drugs and discount others, so long as the average cost of their entire product line equaled the price paid by large HMOs," the Register reports (Orange County Register, 1/5).