State can find partners to reduce drug prices
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At times, states, rather than the federal government, must take the lead in advocating for consumer rights. The issue of negotiating bulk-rate prices for prescription drugs is one such opportunity.
The state Legislature's move to strengthen Hawai'i's law mandating negotiated rebates for the 112,000 enrolled in the Hawai'i Rx Plus program is a step in the right direction.
The 2007 session work included a bill that changed the law so that the Lingle administration must negotiate with drug manufacturers for lower prices on prescription drugs for the program, which benefits the "gap group" whose prescription coverage is lacking but who do not qualify for Medicaid.
The administration has resisted this directive; the governor would prefer to see the relatively small Hawai'i Rx Plus constituency pooled with the 28,000 seniors enrolled in the state's federally funded pharmacy assistance program.
The argument is plausible: Hawai'i Rx Plus users' purchase of prescription drugs only amounts to about $3,600 a month — not enough to entice drug companies to offer good deals. Many of the members prefer generics or use over-the-counter medications as a rule. The pharmacy assistance program would enlarge the group enough to give the state more leverage.
However, involving the senior plan in the deal-making would require federal approval. And there are other ways of enlarging the pool that wouldn't need a green light from Washington.
Across the country, states have formed coalitions for negotiating with drug companies. Among them: the New England Tri-State Prescription Drug Purchasing Coalition, comprising Maine, New Hampshire and Vermont. Maine has led the nation in this trend, negotiating bulk drug prices under authorization its lawmakers passed in 2000.
In an environment of rising drug prices, it's in the state's own interest to be the advocate for its citizens' healthcare. The administration should approach other states willing to form a coalition, to increase the market power of Hawai'i consumers.