L.A. prescription drug cost idea might expand to include Ventura

Published on

Ventura County Star (Ventura, California)

For the uninsured and the underinsured, some Los Angeles leaders are hoping a new idea will help ease the burden of prescription drug costs.

The idea is to buy in bulk, using a prescription drug card that residents could use for a discount of about 20 percent, perhaps more. The cards have been used elsewhere, but the motion was advocated by Los Angeles Mayor Antonio Villaraigosa in 2004 — before he was elected mayor.

There’s the possibility the card could reach beyond the city limits to include all residents of Los Angeles County or the Southern California region. That’s a detail Los Angeles City Council eventually is going to have to decide.

If expanded beyond the city, Ventura County residents could join Los Angeles residents to create a pool of patients for bulk buys and good deals on prescription drugs.

Some Ventura County residents said such a deal made good sense.

Jackie Mahon of Camarillo said she has prescription drug coverage now, but won’t when she retires. Prescription drug prices are way too high, especially for older people on a fixed income, she said.

“That (a drug discount card) would be good,” she said. “That would help older people a lot. It would help everybody.” More participants would give the program more clout, which could mean better discounts and make the program more successful, said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights, which worked with Villaraigosa on the idea.

“All these people don’t have to be in the same place,” Flanagan said. “The key thing is when the negotiator goes in representing all these people.” Devil in details California has about 6.5 million residents without health insurance, according to the California HealthCare Foundation. That’s 20.6 percent of the state’s non-elderly population the sixth highest in the nation.

People who do not have health insurance or who have health insurance with high premiums and no prescription drug coverage would benefit the most from the LA Rx plan as it is envisioned, said Tom Coultas, assistant general manager of the city of Los Angeles’ personnel department. Coultas oversaw a committee’s research into the proposal.

Those patients who have health insurance that covers prescriptions or who may qualify for the new Medicare drug benefit in January, probably won’t benefit as much, he said. People may be able to use the cards to cover prescription drugs their plans don’t cover.

Coultas expects a consultant’s report and recommendation will go to the Los Angeles City Council in November. At that point, details have to be worked out, such as whether there is increased liability in expanding the program to people outside of the city or if there would be a fee for the card.

The report found there was value in doing the program, Coultas said. So the recommendation is to draw up a request for companies that would contract with the city to run the program.

“I love the concepts,” Coultas said. “Like all healthcare issues, the devil’s in the details.” Jeff Mills of Camarillo said he bought a small vial of eyedrops recently that cost him $20 with his insurance co-pay but would have run $111 otherwise. He sees the high prices as a problem, but wanted more details on any program that would propose to cut prices.

“I’m always worried about government management,” he said. “It could end up costing more anyway.” Market forces Under the L.A. plan, a benefit manager would buy drugs at a bulk rate and sell them to residents at below-retail prices. The company could do this through negotiating price discounts or rebates with drug manufacturers and wholesalers.

The original proposal compared it to Costco, where items are bought in bulk and sold to members at a discount.

Drug companies would not have to negotiate with the benefit manager, but Flanagan said basic market forces would make them more inclined to do so.

The Pharmacy Research and Manufacturers of America does not have a policy on the L.A. proposal, but the organization has been following the program, said spokeswoman Wanda Moebius. PhRMA represents many of the nation’s pharmaceutical research and biotechnology companies.

“We think it has the potential to help some people by aggregating the purchasing power of these patients,” she said.

Proponents of the L.A. plan point to the success in Nassau County, N.Y.

The program was developed by the county comptroller’s office and launched in June 2004.

The discount card originally was sent out by mail and the county is encouraging doctors, senior groups and different organizations to get them to their members. There is no fee, no application and no questions. The card is available to anyone living in the county.

Comptroller’s office spokeswoman Laurel Factor said the county didn’t want any barriers to people getting or using the cards, so it didn’t ask for enrollment forms or age restrictions.

“We found if they have to call for it or have to ask for it, they’re less likely to use it,” she said.

The comptroller’s office reports the program has saved residents more than $3 million on the retail price of prescription medicines. The average savings is about $17 per prescription, about 24 percent below retail. More than 90 percent of the county’s pharmacies participate in the program, including major drugstore chains.

Residents may not use the card in combination with any other discount card or insurance coverage to further reduce the price. They may, however, use it to cover any drugs not covered under their existing plans.

The card also can be used on mail-order purchases, diabetic supplies and some injectable medications. Common prescription drugs covered by the cards include asthma inhalers, allergy medicine, sleep aids, cholesterol-lowering drugs and birth control.

The county doesn’t pay anything to have the program. The pharmacy benefit manager bears all the administrative costs and participating pharmacies pay a small fee per prescription filled per card, Factor said.

Other cities and counties, including Los Angeles, are seeing that Nassau County is offering the program at no cost and it is building interest, she said.

Coultas said such examples show it can be done.

“It’s a very interesting program,” Coultas said. “I truly hope we get through the details. That’s where the true issues are.”

Consumer Watchdog
Consumer Watchdoghttps://consumerwatchdog.org
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

Latest Videos

Latest Releases

In The News

Latest Report

Support Consumer Watchdog

Subscribe to our newsletter

To be updated with all the latest news, press releases and special reports.

More Releases