Schwarzenegger Administration Details Plans for Drug Discount Card Program
The administration of Gov. Arnold Schwarzenegger (R) on Tuesday at a hearing of the Senate Health and Human Services Committee provided more details about a drug discount program state officials proposed last month "as an alternative" to bills addressing the importation of lower-cost prescription drugs from Canada, the Sacramento Bee reports (Rapaport, Sacramento Bee, 9/22). Health and Human Services Agency Secretary Kim Belshe in August indicated that Schwarzenegger planned to veto four reimportation bills in favor of the CaliforniaRX program, which would provide discounts for 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, 8/23). The program would require $3 million in annual funding and would be open to Medicare beneficiaries or people enrolled in private health plans who need help in paying for prescription drugs not covered by their health insurance.
The program's discounts would come in part from reduced payments to pharmacies and negotiated rebates from drug makers, state officials said Tuesday. Legislation for the plan could be introduced early next year, the Bee reports.
State officials on Tuesday said the CaliforniaRX discount card, which could be available as early as Jan. 1, 2006, might save about 4.8 million low-income state residents between 20% and 50% on drug costs.
Committee Chair Deborah Ortiz (D-Sacramento), sponsor of one of the reimportation bills (SB 1149), said at the hearing, "The bills before the governor will produce real and immediate savings for California consumers. I am willing to consider the governor's discount card, but it must be in addition to, not in lieu of, the Canadian import measures now on his desk."
Sandra Shewry, director of the Department of Health and Human Services, on Tuesday told lawmakers, "I absolutely share your concern that hard-working California families cannot afford prescription drugs." Shewry added that Schwarzenegger has discussed his proposal with drug makers and received backing from many top industry executives.
Wanda Mobius, spokesperson for the Pharmaceutical Research and Manufacturers of America, said she could not comment on CaliforniaRX because she had not yet seen the proposal in writing. However, she said drug companies generally support voluntary discount programs that use the leverage of a large bulk-purchasing pool to create savings. "There is definitely a role for free-market pressures to bring down the cost of drugs," Mobius said.
Carlo Michelotti, CEO of the California Pharmacists Association, said his group also supports alternatives to reimportation, adding, "The governor's plan does not create felons out of grandmas and grandpas who are desperate for affordable drugs" (Sacramento Bee, 9/22).