Democrats Unveil Plan To Lower Medicine Costs

The Express-Times — Friday, March 7, 2003

The Express-Times

TRENTON — A cadre of Democrats unveiled a plan Thursday to have the state negotiate lower prescription drug prices for those covered by state health plans.

The measure, dubbed the New Jersey Rx Card program, comes as Gov. James E. McGreevey has proposed scaling back the state's Pharmaceuticals for the Aged and Disabled program to deal with a $5 billion deficit. Sponsors contend the New Jersey Rx Card plan would save the state millions of dollars and provide pharmaceutical coverage to as many as 1.7 million people.

"The state will act as a pharmaceutical benefits manager" reducing costs, Assemblyman John Burzichelli, D-Paulsboro, said during a Statehouse news conference. "We all know there is a health care crisis sweeping the country and drugs are at the center."

Pharmaceutical benefits managers are essentially middlemen who buy medicines and other health care products in bulk to reduce costs.

The Rx Card proposal calls for the state to hammer out prices with drug companies, essentially buying in bulk to cut costs. Their logic: purchasing in power would create an economy of scale, or reduced prices in exchange for the increased volume.

In exchange for negotiating reduced prices and getting bonuses from drug companies, eligible consumers would see prices drop.

Burzichelli, along with Sen. Stephen Sweeney, D-West Deptford; Assemblyman Douglas Fisher, D-Bridgeton; and Assemblyman Jeff Van Drew, D-Cumberland, are also sponsoring the bill, patterned after Maine legislation.

"We cannot allow tough financial times to put at risk the programs that people rely on," Fisher said.

Si Larson, a prescription drug activist with the American Association of Retired Persons, called it courageous.

"New Jersey is the heart of the pharmaceutical industry," Larson said. "Even states that don't have a large pharmaceutical industry have been afraid to pass this."

Van Drew said Rx Card would not hit drug companies too hard.

But one potential stumbling block could prove to be a provision in the bill leveraging Medicaid, meaning drug availability would be linked to Medicaid's reduced prices for drugs. Should companies fail to extend the lower Medicaid rates to all consumers, the state would decline to carry that drug.

That aspect of the Maine program has kept it before the high court.

"We have serious concerns about any program patterned after the Maine program," said Bruce Lott, spokesman for the Pharmaceuticals and Research Association. "The Medicaid program was designed to give health care to the poor. A program like this would deny that."

"This bill would never come between the doctor, patient and pharmacist relationship," Van Drew said.

Sweeney denied the bill would prove unconstitutional.

By pushing the program, Democrats hope to save the PAAD, Senior Gold and Medicare Family Care programs millions of dollars. Instituting the provision would also fulfill a plan first advocated by McGreevey.

Passage of the plan would mean Democrats adopt pharmaceutical benefit managers as a cost-cutting measure despite spending time and energy during the 2002 U.S. Senate race portraying Republican nominee Douglas Forrester as a prescription drug profiteer.

Forrester, a wealthy Mercer County businessman, became a multimillionaire through owning a pharmaceutical benefits managing company.

"We are not for profit. We would be trying to drive the price down," Sweeney said, flanked by seniors and groups such as the American Association of Retired Persons.

Assemblyman Michael Doherty, R-Warren/Hunterdon, said he supports the bulk purchasing to reduce the cost of government.

"Obviously, anytime you can use an economy of scale to get a better rate for the citizen I will take a look at it," Doherty said. "But it is hypocritical of Democrats to be looking at a plan they criticized Doug Forrester for."

Bridgit Devane of New Jersey Citizen Action said the issue with Forrester was corporate secrecy.

"His books weren't open. That's what we kept asking Doug Forrester was to open his books," Devane said. "This is the right time for New Jersey to move forward with this legislation and allow the state to negotiate with drug manufacturers. New Jersey is hurting right now."

According to those pushing it, the prescription plan also would cover:

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