Schwarzenegger Asks Drug Manufacturers To Reduce Prescription Drug Costs
Gov. Arnold Schwarzenegger (R) on Thursday telephoned several unnamed pharmaceutical company executives asking them to voluntarily lower prices for prescription drugs for low-income California residents, the Sacramento Bee reports. The calls come as Schwarzenegger is expected by the end of the month to veto a package of bills that would allow the reimportation of lower-cost, U.S.-made prescription drugs from Canada. According to the Bee, those in support of the pending legislation say the calls "were timed to fend off criticism, in the event he proceeds with vetoes, that he is doing the bidding of major campaign donors" (Delsohn/Talev, Sacramento Bee, 9/10).
Health and Human Services Agency Secretary Kim Belshe in August sent a letter to state lawmakers that indicated Schwarzenegger would veto the reimportation bills unless legislation is revised to include a new program, called California Rx, which would provide discounts for uninsured low-income state residents with annual incomes less than 300% of the federal poverty level (California Healthline, 8/26).
California Rx would establish group discounts, give qualified state residents electronic cards that pharmacists could use to find the lowest prices and hire an outside vendor to negotiate other price discounts, the AP/San Diego Union-Tribune reports. If the drug companies support the plan -- which they have previously rejected -- Schwarzenegger could veto the reimportation bills while saying he negotiated cost-cutting alternatives, the AP/Union-Tribune reports.
The California Rx proposal did not receive approval last month, as lawmakers said the lowest prices the program could produce would be "far higher" than those from Canadian pharmacies, the Union-Tribune reports (Wasserman, AP/San Diego Union-Tribune, 9/10).
Schwarzenegger's series of calls "did not yield any firm commitments," according to the San Jose Mercury News (Folmar, San Jose Mercury News, 9/10). However, the calls "reveal the political dilemma Schwarzenegger faces if he kills legislation likely to be popular with voters, but opposed by giant pharmaceutical companies that are among his biggest campaign contributors," according to the Union-Tribune (AP/San Diego Union-Tribune, 9/10).
Schwarzenegger spokesperson Margita Thompson said that discussions between the administration and the industry will continue. She said that Schwarzenegger "made clear the key parameters of his proposal, which he believes is a better alternative to the Canadian-import bills that are pending. He thinks we can do better working with the industry, but the ball is in the drug companies' court" (San Jose Mercury News, 9/10).
HHSA spokesperson Nicole Kasabian Evans said the proposals would amount to "about a 15% discount from the lowest retail price." She added, "We hope [the drug manufacturers] will sit down at the table with us. There are nearly five million uninsured people in the state. That's a pretty good market."
Nan Brasmer, president of the California Alliance for Retired Americans, said that the governor's request is "not a realistic thing because the companies aren't going to keep their prices at a reasonable place in order to offer something that's worth the trouble. Other states have passed these import laws and are taking a chance to see what happens. Somebody's got to stand up and say, 'Look, enough is enough'" (Sacramento Bee, 9/10).
Health Access Executive Director Anthony Wright said that the Schwarzenegger administration is "trying to spin it that he's negotiating with drug companies for better prices. If, at the end of the day, he doesn't sign the bills, it's basically a fundraising call to companies that have already given him a lot of money" (San Jose Mercury News, 9/10).