House prescription drug bill would save tax dollars

Wednesday, March 5, 2003 9:26 AM PST

The state House of Representatives has approved a comprehensive prescription drug bill that would both lighten the financial burden of Washington seniors and other, uninsured residents and slow the growth of the state's health care costs.

The bill now faces an uncertain future in the Senate, where Gov. Gary Locke's active support could prove critical. Senate leaders currently are focused on a less ambitious bill, which would create a modest senior drug benefit.

There are at least a couple of reasons to favor the House-approved legislation. Both have to do with money -- the out-of-pocket dollars some 50,000 seniors and uninsured Washingtonians would save and the millions of tax dollars this bill would save the state.

The House-approved legislation is designed to benefit virtually all seniors and people who lack drug coverage, while the Senate plan promises benefits only to seniors age 65 and older with incomes of less than $13,290.

Moreover, the House plan would save the state an estimated $20 million over the next two years. The bill being advanced by Senate leaders would cost the state $15 million over the biennium.

That budget savings versus budget cost, alone, ought to be enough to tip the political balance in favor of the House plan. Lawmakers are facing a $2.4 billion revenue shortfall. This isn't the time to be considering a new health care benefit.

The beauty of the House plan is that it promises much broader benefits than the Senate proposal and, at the same time, reduced state spending on health care. The savings for both consumers and the state would come about through the creation of a drug purchasing consortium and a state preferred drug list.

The consortium would pool the buying power of all state agencies that purchase prescription drugs, and negotiate discount prices in much the same way private health plans negotiate discounts. Businesses, private groups and residents who lack drug coverage would be able to join the purchasing consortium and benefit from the negotiated discounts.

The preferred drug list, called a formulary, also is a practice that nearly all private health plans use to reduce prescription drug costs.

It involves evaluating all drugs in the same class to determine which are most effective. If two drugs are found to be equally effective, the cheaper drug would be listed as the preferred drug. People who receive health care through the state would automatically be prescribed the preferred drug unless their doctor specifically prescribed the more expensive drug.

The prescription drug industry opposes state preferred drug lists and bulk buying pools. Understandably. They cut into profits. Drug companies would prefer the status quo.

In each of the past two years, the industry has managed to beat back legislation similar to this House-approved bill. The industry is gunning for it again, but it should prove a more difficult target this year.

With health-care costs increasing by double-digits annually and a huge budget shortfall looming, legislators would have a hard time explaining why they would pass up this opportunity to help seniors and uninsured Washingtonians and rein in medical costs.