TOPICS > Health

Pricing Drugs

May 20, 2003 at 12:00 AM EDT


GWEN IFILL: Now, how the states are moving to make prescription drug coverage affordable. Ray Suarez has that.

RAY SUAREZ: At a time when prescription drug costs are rising and many Americans have no drug insurance coverage, some states are stepping in to help. A controversial program in Maine got a boost yesterday when the Supreme Court allowed it to go forward after a legal challenge.

The Maine plan, also known as Maine Rx, pressures pharmaceutical companies to offer discounts on prescription drugs for the state’s uninsured. The products of companies that don’t comply would require state approval before they could be prescribed for Medicaid patients. Many other states around the nation are now preparing their own programs.

For more, we turn to Kevin Concannon, the former commissioner of Maine’s Department of Human Services, who helped shape Maine Rx. He is now director of the Iowa Department of Human Services. And Marjorie Powell, senior assistant general counsel for the Pharmaceutical Research and Manufacturers Association of America, also known as PHARMA. The group opposed the plan.

Kevin Concannon, how was Maine Rx designed to work and what would it accomplish?

KEVIN CONCANNON: Well, it was really designed to provide prescription drug discounts to some 325,000 Maine people who do not have prescription drug insurance. By the states allowing them to enter into a program where they would get a card from the state, it would be, they could take it to any drugstore in the state, and we would finance that discount by negotiating with the drug companies to obtain a discount similar to the Medicaid program, which, on average, runs in the 20-25 percent range. And there was lots of interest and motivation in this in Maine because we’re bordered by two Canadian provinces where the same medications in the U.S. are available there for considerably less.

RAY SUAREZ: So this was meant to capture a larger population than simply the Medicaid program.

KEVIN CONCANNON: Exactly. The relationship to Medicaid is we know that there are people with conditions, chronic conditions, if they do not take the kind of life sustaining medications, they’ll have that catastrophic stroke or heart attack and be so debilitated, they’ll need a full Medicaid program. The rationale in Maine was let’s use Medicaid to help the 325,000 residents of the state who do not have prescription drug insurance.

RAY SUAREZ: And if a company was not willing to negotiate on the rates, you could effectively keep that drug out of Maine?

KEVIN CONCANNON: Well, the option was given to the Department of Human Services to subject that drug to something called prior authorization. Before a physician or a prescriber could prescribe it, they would have to try an alternative drug if one were available. Certainly it has been my intent, and I would suspect going forward the intent of anyone running the program, not to prior authorize medications for this there are not good alternatives.

But as we know now in the drug market there are many look alike drugs, me too drugs, they’re called. And they have different levels of effectiveness and very different levels of cost, and this was really a very powerful incentive for the states to use to encourage the manufacturers to give us that Medicaid level discount, which is still a smaller discount, by the way, than is available to our Canadian neighbors to the North and the East.

RAY SUAREZ: Marjorie Powell, your association, PHARMA took Maine to court, what were your objections to the way the program was structured?

MARJORIE POWELL: Our primary objection to the Maine Rx legislation the way as it was enacted in the statute by the legislature is that it used Medicaid patients, the sickest, poorest people in the state of Maine, as the leverage to get discounts for not just the uninsured in Maine, but the statute actually said every Maine resident and we thought that that was bad public policy and bad public health care for the Medicaid patients in the state of Maine. We challenged the program because we didn’t think that was consistent with the federal Medicaid law, which says that Medicaid is to benefit Medicaid patients.

RAY SUAREZ: By a six to three ruling, the justices united to, in effect, let the program take effect as it was designed. But is this fight over?

MARJORIE POWELL: Actually, that’s not exactly what the court said. They technically sent the case back to the first circuit in Boston, which will send it back to the district court where the district court then is directed to, one, find out what the secretary of Health and Human Services, the head of the Medicaid program nationally, thinks about the Maine Rx program, whether it would be consistent with the federal Medicaid objectives and then, two, to weigh the burdens on Medicaid patients with any benefits that might accrue to Medicaid in Maine from the operation of this program. So the case is not yet settled.

RAY SUAREZ: Well, is there anything in the way that the opinions were written that gives PHARMA some encouragement as it continues its legal road?

MARJORIE POWELL: Well, we think that several of the opinions are fairly encouraging because a number of the Justices did recognize that there will be a burden placed on Medicaid patients and potentially a burden on Medicaid providers, those physicians and pharmacies that have to contact the state and go through several steps in order to get permission to prescribe a drug that their Medicaid patient needs. But until the court actually looks at evidence, it’s not clear what the court is going to do.

RAY SUAREZ: Kevin Concannon, what did you make of the four separate opinions, the six/three ruling? Where does it leave the design that you helped create?

KEVIN CONCANNON: We were deeply very much encouraged by it not only for Maine people but for people across the country in all 50 states. Just this afternoon I left Governor Villsach here in Des Moines, and we’re very encouraged by that and interested in the state extending the kind of access to discounted prescription drugs that are available now only in a few places in the U.S.. And I know there are 28 states that filed an amicus brief with Maine.

With all due respect, I think my view of what the court said, they were not persuaded this was going to be harmful to Medicaid patients. Maine is an example, and many other states in the country currently subject their Medicaid medications to the practice of prior authorization. Florida, for example, was sued by the manufacturers on that very issue. And the federal court has upheld the legitimacy of it.

So I think prior authorization carefully done, carefully executed, actually can help people by making sure they’re getting the medications that are best for them but also are cost beneficial. In the case of the Maine Rx case I think what’s encouraging across the country this very day — day one after the Supreme Court decision — is the interest of states in saying let’s look again at what we may do for the millions of people in our country literally, not just elderly people, but people of all ages who do not have prescription drug insurance, yet who have chronic conditions.

MARJORIE POWELL: Ray, let me also remind people or tell people who don’t know, that Maine actually has had, was one of the first states approximately 25 years ago, to establish a program to help seniors with chronic conditions who were low income afford their medications.

And as nearly as I can tell, all of the innovative pharmaceutical companies were participating in that program on a voluntary basis, giving discounts back to the state for what was called Drugs for the Elderly program. That program had been expanded over a number of years and was providing, and I understand is still providing services to a number of people in Maine. There are a variety of states that have similar kinds of programs to make prescription drugs affordable to seniors who don’t yet have a Medicare drug benefit.

RAY SUAREZ: Well, what do the versions that you can live with look like that makes them different from what Maine is trying to do?

MARJORIE POWELL: Well, actually one of the problems with Maine is that it was using Medicaid as the leverage to get discounts from pharmaceutical companies. But companies are providing discounts and free drugs in a variety of settings; for example a number of the companies have discount cards for seniors and disabled people who are eligible for Medicare, which they see as an interim until Congress passes a Medicare drug benefit.

In addition, the companies participate in various state pharmacy assistance programs that are operated in, I think twenty-six or twenty-eight states now. And companies have free drug programs for people who cannot afford their medications –patient assistance programs, all of which within the pharmaceutical industry are now available on a Web site

RAY SUAREZ: Kevin Concannon, you were you trying to get in with a response?

KEVIN CONCANNON: Well, what I was going to say was the program Marjorie has referred to is true it has been in effect in Maine since 1976 but it was a much narrower program and indeed there were drug manufacturers who did not participate. It had at its height about thirty-three or thirty-four thousand people. Within a year of implementing a program similar to Maine Rx, we had over 114,000 people in a very small state. So there is tremendous need that is going unmet.

Many of these programs that Marjorie just referred to are very cumbersome to access. Speak to any physician’s office about the so-called beneficial programs available through the manufacturers. It requires a lot of time in the physician office to fill it in. It is very complicated. Patients are uncertain. They get it for a limited period of time but they don’t know about six months from now or a year. So I don’t think that’s quite the answer by any means.

Programs like Maine Rx and the Healthy Maine Prescription Program that was also sued by the pharmaceutical manufacturers were very popular with all of the physician in the state, with pharmacists up and down the state who like the program, and yet they were shut down really by the manufacturers who don’t like the use of the Medicaid program as a lever, basically. It is not harming Medicaid patients. It’s helping people similarly situated who do not have prescription drugs whose incomes may be slightly above that. I think it’s….

RAY SUAREZ: Your response Ms. Powell?

MARJORIE POWELL: The court is going to be asked to address the question of whether this program will impose a burden on Medicaid patients that is sufficient to outweigh any benefit to Medicaid. But there is evidence from a number of other state programs that are trying to impose severe restrictions on Medicaid patients’ access to prescription drugs. Former Commission Concannon mentioned the Florida program, but the Florida Legal Services brought a lawsuit challenging the state of Florida because Medicaid patients were not getting any medications in a number of instances.

And I understand that they are working toward a settlement of that which will provide an appeal process and information for Medicaid patients who don’t get their drugs about why they didn’t get them and what they can do to appeal that. We think it’s very important that Medicaid patients have access to the drugs they need, particularly Medicaid patients who are stabilized on drugs that they’ve been taking for a number of years for chronic conditions: Heart disease, diabetes, and that those drugs not be switched because the doctor doesn’t have time or can’t get permission from a state agency.

RAY SUAREZ: Ms. Powell, Mr. Concannon, thank you both.