Lawmakers Say Schwarzenegger Prescription Drug Discount Plan Intended To Counter Reimportation Legislation
State legislators on Friday said a letter from Gov. Arnold Schwarzenegger's (R) administration indicating his intention to veto four bills addressing the reimportation of lower-cost, U.S.-made prescription drugs in favor of his own prescription drug discount plan was a "decoy" that was "floated so late in the legislative session" it could delay a vote on the issue until next year, the San Diego Union-Tribune reports (Ainsworth, San Diego Union-Tribune, 8/21). The letter, which Health and Human Services Agency Secretary Kim Belshe sent to legislators Thursday, indicated that Schwarzenegger will veto bills that would allow the purchase of prescription drugs from Canada unless the bills are revised to include a new program to provide discounts for uninsured low-income state residents.
Belshe's letter proposed revisions to the bills that would establish a California Rx program to provide prescription drug discounts for state residents with annual incomes 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 their medications through state or pharmaceutical company programs (California Healthline, 8/20). The proposal would require $3 million in start-up funding (Folmar/Feder Ostrov, San Jose Mercury News, 8/21).
Sen. Deborah Ortiz (D-Sacramento), who sponsored one of the reimportation bills (SB 1149), said the governor likely will need legislative approval for his plan, adding that she plans to ask lawmakers to delay hearings on the proposal until after the Legislature adjourns at the end of the month.
Legislators who have backed the reimportation bills said the governor's plan would save low-income residents 15% on prescription drug prices, compared with an estimated 70% from reimportation.
Assembly member Dario Frommer (D-Glendale), who sponsored one of the reimportation bills (AB 1957), said, "Is it savings? Yes. Is it the best we can do? No."
Ortiz said that Schwarzenegger's program did not appear to provide "anywhere near the savings that might be realized through importation" (San Diego Union-Tribune, 8/21).
Belshe said reimportation is illegal and would be just a "symbolic gesture" that would not significantly reduce prescription drug costs (San Jose Mercury News, 8/21).
Critics of the governor's plan, which was released on the last date to amend bills this session, said it would require them to engage in the "gut and amend" process of "radically changing bills at the last minute," a practice "the governor has denounced," the Union-Tribune reports (San Diego Union-Tribune, 8/21).
Frommer said the letter was "a political gambit, not a policy one. It's a rewarmed industry proposal" (San Jose Mercury News, 8/21). According to Frommer, Schwarzenegger is "trying to deflect attention away from whether he is going to take a stand with the pharmaceutical industry or with the people." Frommer added, "We have been trying to engage" the Schwarzenegger administration about prescription drug discount legislation, but "[w]e got one call requesting information in January and then we never heard from them until 6:30 [Thursday] night when someone drops a letter off at my office."
Ortiz said the governor is "trying to find a compromise approach at the 12th hour that none of us can fairly evaluate" (Salladay, Los Angeles Times, 8/21).
GOP consultant Dan Schnur called Schwarzenegger's plan "smart" because "[e]very Democratic legislator facing a competitive re-election this fall now has to decide if they want to see direct mail that accuses them of voting against Arnold Schwarzenegger's plan for affordable prescription drugs."
Belshe said, "Yes, it's late in the game, but we feel it's an important, reasonable and responsible alternative to the pending measures in the Legislature."
Lawmakers said they expect the governor to veto the reimportation bills, which likely will arrive on his desk next week (San Jose Mercury News, 8/21).
Schwarzenegger on Friday "pressed ahead with his plan," sending a letter to HHS Secretary Tommy Thompson requesting a federal waiver that would be necessary to implement his program, the Union-Tribune reports (San Diego Union-Tribune, 8/21). Schwarzenegger wrote in the letter that the state's reimportation efforts "reflect the depth and scope of public frustration with prescription drug costs," but the Legislature's proposed bills would be "contrary to federal law and over-simplify the complex safety, trade, supply and pricing issues involved." In addition, Schwarzenegger wrote that the bills would fail to "bring much needed price reductions to consumers in the near term."
Schwarzenegger continued, "By extending Medi-Cal prices to targeted low-income uninsured residents, this approach would build upon our state's existing system of negotiated drug discounts, thus making relatively quick implementation possible." The governor concludes in the letter that other recent proposals aimed at lowering drug costs are "insufficient," and that "it is time for the broader issues associated with the global marketplace to be considered and addressed" (Office of the Governor release, 8/20).