Healthy Skepticism Library item: 737

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Publication type: news

California prescription drug plan offers Canada-sized discounts
Bloomberg News 2005 Jan 6

Full text:

Almost 5 million Californians will be able to buy prescription drugs at prices comparable to those in Canada, where medicines cost as much as 70 percent less than in the U.S., under a plan by Governor Arnold Schwarzenegger.

The plan allows low-income, Californians without medical insurance to get the discounts through their local pharmacy. Schwarzenegger last year vetoed six bills aimed at lowering prescription drug costs in part by encouraging consumers to seek medicines from Canada.

Government regulations keep Canadian drug prices lower than in the U.S., even when the medicines come from many of the same factories that supply the U.S. Cheaper drugs may help cut health-care costs by keeping people out of the emergency room, according to AARP, an organization representing more than 35 million U.S. citizens ages 50 and older.

“Prescription drugs are such a vital, vital part of medical treatment these days,” said Mark Beach, a spokesman for the California branch of AARP. “Prescription drug availability is about the prevention and therapeutic treatment that keeps people out of emergency rooms.”

State, local and federal governments were expected to pay most of the $41 billion in hospital bills and health care for the 43.6 million uninsured Americans in 2004, according to estimates by the Henry J. Kaiser Family Foundation.

As part of Schwarzenegger’s plan, the Pharmaceutical Research and Manufacturers of America trade group has promised to create and publicize a new Web site that will help poor Californians learn about discount- and free-drug programs already offered by some drugmakers, including Pfizer Inc., Eli Lilly & Co. and Merck & Co.

Veto

In vetoing the Canadian drug bills in September, Schwarzenegger said he opposed the tactic because it violated federal law. President George W. Bush opposes Canadian drug imports on the grounds that the medicines might not be as safe if they came from Canada.

Other states, including Illinois, New Hampshire and Wisconsin, have set up Web sites aimed at helping citizens buy drugs from Canada. Americans bought more than $1 billion in medicines from Canada last year.

Pfizer’s nationwide initiative, which began in August, offers families making less than $45,000 and individuals making less than $31,000 an average discount of about 37 percent on its drugs. The company began enrolling participants in August. Families making less than $31,000 can get their medicines for free.

In Talks

The company is in discussions with California about participating in the state program, according to Pfizer spokesman Jack Cox.

Eli Lilly spokesman Phil Belt didn’t immediately return a telephone call placed to his cellular phone after normal business hours. Merck spokesman Tony Plohoros declined to comment.

California health officials are set to discuss the plan in more detail later today. The governor’s office declined to comment yesterday on whether the program offered any incentives to encourage companies to participate. Wanda Moebius, a spokeswoman for the Pharma trade group, declined to comment.

Without using incentives, California may not get a high enough level of participation from drugmakers, according to the Consumer Federation of America, which criticized the plan.

“This will be a cosmetic effort, and we don’t expect it to produce significant relief for any large number of Californians,” said Richard Holober, executive director of the consumer group. “I think that it is nibbling at the problem.”