From Maine to America, lowering the cost of Rx Drugs

Elana Levin

From Maine to America, lowering the cost of Rx Drugs

As you may know today was DMI's Marketplace of Ideas panel on Reducing the Cost of Rx Drugs. The speakers and conversation were great but without further adieu I give you this event's QUOTE OF THE WEEK. From the Hon. Richard Gottfried, Chairman of the New York State Assembly Health Committee. "Pataki's tv ads for ChildHealth Plus is like Japan taking credit for peace in the Pacific... He fought us tooth and nail!"

But back to the subject at hand, key panelist Sharon Treat had a cool approach to explaining what the rest of the country can learn from the success of her program, Maine Rx plus. Inspired by text from DMI's email invitation to today's event which asked "What can Speaker Pelosi learn to advance her progressive plans from Maine State Senator Sharon Treat," she opened her talk today with some suggestions for the new Speaker.

From my notes here are the three suggestions she had for Speaker Pelosi, and really all of the new congress. I'm paraphrasing to the best of my abilities:

1 * You have the majority so for godsakes use it. Use it quickly, use it decisively.
Medicare part D needs to be fixed. There are lots of price negotiation bills in congress. Drug re-importation too.
Some of the legislation being proposed would simply say that the government has the right to negotiate prices. That does absolutely nothing. If all congress gets is the right to negotiate, we've accomplished nothing except putting a snow-job over people.
Maine does have something to say to the rest of the country and to congress. Maine's Medicaid drug costs increases are among the lowest at 3% a year where national trends are three or four times as much. Nationally drug costs increase exponentially every year as well.

2 * My second point for speaker Pelosi is if you support reducing the cost of drugs in a significant way, people will back you up. The reason we have what we have in Maine is not because someone up in the legislature said to do it- it happened because there was a petition campaign run by the grassroots.
In Maine we have clean elections and cheap elections. Someone who can't raise money could spend 3 or 4 thousand to get themselves elected. Running a low-cost campaign you end up going door-to-door and what did we hear when we went door-to-door? That Medicine costs were through the roof!

We didn't have polls to tell us that the public support was there but we could tell because we were out there speaking to people. Now we have polls; Kaiser and Harvard released a study on public's attitudes after the election on what congress should do. And given the strength of the public's support, if Speaker Pelosi and the New York State government don't take action on this, something is seriously wrong.

85% of people supported price negotiations for Medicare Part D. Among Dems it polled 92% and 85% among independents. Negotiations even polled 74% among Republicans. When Maine Rx came up for a vote politically it was seen as bad thing to vote against it.

3 * States are sick of being the laboratories for democracy. And on some of these issues it is time for the ideas to move from the laboratory to the marketplace. We have experiments on reducing the cost of drugs all over the country- it is about time we had a national policy that implemented them. I'm still cynical about the national level, [Pharmaceutical Research and Manufacturers of America] PhRMA is running around trying to get money for lobbyists on the Democratic side. But states have constraints on what we can do.

One insightful way of looking at the issue posed by Treat was that the reimportation of drugs from Canada back into the US is really parallel trade and a free trade concept. The pharmaceutical lobby has been trying hard to deliberately write drug reimportation out of America's trade deals. What are they, communists or something? Assemblyman Gottfried pointed out that "its hard to use the word 'freemarket' when it's a market dominated by huge multinationals many of whose products are strongly patent protected. You are dealing with monopolists in almost anything. Talking about a free market is just not accurate when your dealing with things as they are now."

Treat also reminded everyone that the Maine Rx program is not the last, best thing to ever happen to the Rx Drugs issue. She said "this just fills in around the edges of what congress did" - what Congress did being passing Medicare Part D in its deeply flawed state.

Doctor Jon Cohen knows just about everything when it comes to know about modifying physician behavior in the interest of getting doctors to prescribe the most effective drugs rather than the ones with just the best advertising. When he ran the North Shore-LIJ Health System he noted that there were 127 narcotics on their formulary (a formulary is a list of preferred medications that insurance will cover without challenging the prescription). Dr. Cohen found that 20 of those narcotics were over used but when the hospital managers would tell the doctors that they wanted to remove drugs from the formulary in favor of better drugs and less expensive versions doctors rejected that. He said the reason why is because the pharmaceutical industry has an incredible pervasive impact on doctors behavior starting in medical school. From the free pens to the free t-shirts to the free lunches. In the end the advertising gets to the doctors. If the advertising didn't work, that the industry wouldn't be spending so much money on physician gifts and hiring cheerleaders to sell drugs to doctors.

Chuck Bell, Programs Director of the Consumers Union and our 4th panelist, spoke very highly of Assemblyman Gottfried's bill to reduce the cost of Rx drugs here in NY. I learned that Gottfried's bill would cover not just lower-income people but anyone that is uninsured or has gaps in their coverage. Bell said "This is a bill for consumers. 5 million New Yorkers could get a discount on drugs with our bill." That's a real big bulk purchase.

Assemblyman Gottfried said "if a genie came in the night and said it would grant me one wish for health care policy my wish would be universal coverage. If I get 3 wishes controlling prescription drug costs would be one of them." He pointed out that one reason that much of the progressive legislation that he'd worked on in New York was actually copying successful legislation from other states. Why isn't New York more of a leader? According to Gottfried "We are more often copying other states rather than other states copying us because the last 12 years we had a governor who wasn't aggressively interested in improving state government. It is not because he's not smart or because he didn't have energy he just didn't want to put smarts and energy to legislating."

So Spitzer's Day 1 is just around the corner. Will Gottfried and the Consumers Union and a whole lot of people without coverage get their wish this year?

By the way, if you want more information on what legislation's out there and what's being lobbyed for do look at the website of the organization Sharon Treat was the Executive Director of till winning a State Assembly seat. The organizaton is National Legislative Association on Prescription Drug Prices and you can learn more about Maine Rx and other legislation there. Keep your eye on the DMIBlog too because podcasts and video of the event will be on our site pretty soon.
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Addendum:
So my paraphrasing isn't perfect but thankfully Sharon Treat read the post and sent me some additional explanation.

Just to clarify - because of how Medicare Part D is currently structured, with the benefit and any negotiation being handled by a multitude of insurance companies, Congress needs to make some major changes in how the program is structured in order to achieve true price negotiation. Some of the legislative proposals merely eliminate language that currently restricts the government from negotiating. We need to make clear to our elected officials that unless they are willing to restructure Part D so that there is a government plan for which prices could be negotiated (which could be done while retaining the private plans as an alternative), they haven't accomplished anything. People will realize this and end up being very, very disappointed in their representatives when they find out nothing has changed.