House Panel Addresses Bulk Rx Drug Purchasing Programs
States should "band together" and purchase prescription drugs in bulk to reduce the cost of treatments for Medicare beneficiaries, advocates testified yesterday at a field hearing of the House Government Reform Subcommittee on National Security, Veterans Affairs and International Relations in Boston, the AP/Worcester Telegram & Gazette reports. A multistate bulk purchasing program similar to the program administered by the Department of Veterans Affairs could "drive down" the cost of prescription drugs for seniors, VA officials told subcommittee members. The VA has established a prescription drug formulary that favors less-expensive generic treatments and requires pharmaceutical companies that offer similar treatments to compete to have their medications placed on the formulary. "Expanding that program to Medicare could drive down drug costs even more," according to John Ogden, director of pharmacy benefits at the VA. "The size of the Medicare program has the potential to create far better (savings)," he said (LeBlanc, AP/Worcester Telegram & Gazette, 7/23). Rep. Tom Allen (D-Maine) last April introduced a bill (HR 1400), called the Prescription Drug Fairness for Seniors Act, that would require pharmaceutical companies that sell treatments to Medicaid and the VA to offer prescription drugs to Medicare beneficiaries at prices no more than the average manufacturer's price in Canada, France, Germany, Italy, Japan and the United Kingdom (Allen release, 7/23).
However, bulk purchasing programs that include prescription drug formularies could limit the number of brand-name treatments covered, which may lead to opposition from some patients, the AP/Telegram & Gazette reports. Brand-name pharmaceutical companies have spent millions of dollars on television advertisements to promote the "latest pills," which has increased the demand for many "high-priced" prescription drugs. In addition, brand-name drug makers argue that the bulk purchasing programs would "quash innovation," adding that the prices of brand-name treatments cover research and development costs for new medications (AP/Worcester Telegram & Gazette, 7/23).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.