Preferred-drug Plan Targets Rx Costs — Wednesday, March 22, 2006


New Jersey pays the highest prices for prescription drugs of any state in the nation. Like most big employers, it would like to cut those costs.

Governor Corzine would wring $145 million from the state's $1.4 billion drug tab by combining the buying power of various state health plans -- those for state employees, Medicaid, Family Care, and Pharmaceutical Assistance for the Aged and Disabled.

Together, they could bargain to "secure the best possible price" for medications, Corzine said.

One way to achieve such savings is through a "preferred drug list" that steers patients toward medications for which a steep discount has been negotiated. That idea has been tried before, and set aside in the face of opposition from the pharmaceutical industry.

The industry "will work with this governor and legislature to help identify savings and ways to protect patient access to drugs," said Hollie Gilroy of the Healthcare Institute of New Jersey, the pharmaceutical lobby.

It's a "politically difficult" proposal, said Michael Olender, a health care organizer with New Jersey Citizen Action. "But if Corzine is seriously taking this on, that's a good thing."

Corzine also proposed that Medicaid recipients make a $2 co-payment for each prescription, up to $10 a month. Pregnant women and children would be exempted.

The plan worries advocates for the poor. "Since they have such a limited income, and are struggling to buy milk and food, very often they'll forgo the prescription," said Laurie Clark of the New Jersey Pharmacists Association.

Meanwhile, Corzine won widespread support for a plan to expand Family Care, the subsidized insurance program for children in families that don't qualify for Medicaid but can't afford health insurance. The program currently enrolls 111,000 children and would add 50,000 – at a cost of $5 million from the state and $9.3 million from the federal government.

Other health-related proposals include an increase of 35 cents in the cigarette tax, to $2.75 a pack; no increase in state hospital subsidies for charity care; and a new hospital tax that would be redistributed in the form of higher Medicaid reimbursement.

News of the tax drew a sharp rebuke from the New Jersey Hospital Association. "It's robbing Peter to pay Paul," said Ron Czajkowski, a spokesman.

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