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Seniors, Low-Income Residents Likely Beneficiaries of State Drug Plans

By Ryan Basen
Capital News Service

Friday, April 1, 2005

ANNAPOLIS - Since the legislative session began in January, lawmakers have examined numerous ideas for slashing what Marylanders pay for prescription drugs.

But as the session winds down, it appears only two groups of Marylanders, certain seniors and low-income residents, will see savings.

Many Americans pay higher costs for prescription drugs than the rest of the world and that won't change in Maryland any time soon.

But, key lawmakers said, thousands of Marylanders will be able to pay significantly less for drugs if these two critical measures become laws, as expected.

"I'm extremely pleased with the progress we've made this year," said Cecil County Democrat David Rudolph, chairman of the House's pharmaceuticals subcommittee.

Rudolph sponsored one key bill, calling for uninsured Marylanders not on Medicaid or Medicare to get prescription drugs at the Medicaid discount if their income is below 200 percent of the federal poverty level.

Those 30,000-40,000 people -- for example, single residents making less than $19,140, or a family of four bringing in less than $38,700 -- would get discounts of about 40 percent on name brand drugs, according to one prominent advocacy group.

The bill, introduced in the Senate by Paul Pinsky, D-Prince George's, has already passed both chambers.

If Republican Gov. Robert Ehrlich approves it, the state will need a federal waiver to provide the discounts, at a cost to the state of $1 million in fiscal year 2006 and $600,000 each additional year.

Another measure that has passed both chambers would benefit seniors. With a popular program set to expire July 1, Senate Finance Committee Chairman Thomas Middleton, D-Charles, and Delegate Peter Hammen, D-Baltimore, sponsored a measure to help seniors on Medicare transition to a new federal program.

That program, Medicare Part D, will not provide them with as much cost relief for prescription drugs as they receive in the state's program, Hammen said. So his bill calls for state subsidies.

Ehrlich supports the measure and has promised $14 million in general funds for 2006 to finance it.

"It's going to help a lot of people out," said Hammen, vice chairman of the House Health and Government Operations Committee.

The Hammen/Middleton measure is a step, but not a final solution, said Charlie Culverson, president of United Seniors of Maryland.

One of the medication issues that lawmakers have been unable to resolve this session is how to support seniors on Medicare trapped in the so-called "donut hole" -- those who annually spend between $2,250 and $5,100 on prescription drugs who will not be covered by Part D.

Subsidizing those seniors would the cost the state $30 million, Middleton said: "Where's the money going to come from?"

The state should monitor the plight of seniors in the "donut hole," Culverson said.

Lawmakers will examine many other medication cost issues during the interim.

Rudolph is pushing two measures that he said would drive prescription drug costs down overall. But, despite passing the House, neither has garnered Senate support.

One bill would create the Maryland Rx Program, combining state employers, businesses and others in a purchasing pool so they could negotiate lower costs on drug plans.

The program would be managed by the Department of Budget and Management, which is opposed in part because it does not have the resources to handle an Rx program for non-state employees, said Deputy Secretary Cecilia Januszkiewicz.

Rudolph also sponsored a bill to regulate pharmacy benefit managers, who serve as middlemen between pharmacies and employers. Some of these companies have been taken to court over allegations of shady business practices, including price gouging.

The bill calls for them to confidentially share their price negotiations and other transactions and is supported by their proposed regulators, the Maryland Insurance Administration.

But Middleton said the Senate Finance Committee needs more time to examine the bill because it requires regulating the private sector. The committee will hold hearings on that measure and the Rx bill Wednesday, just days before the session ends.

Both seem destined for the same fate as the Canadian drug plans. Several lawmakers introduced bills this session to allow the state to import prescription drugs from Canada because they would be cheaper than drugs made and sold here.

But none were approved by their assigned committees. The state would need a federal waiver to operate the program and, lawmakers said, the Canadian government could cut off supplies and does not inspect many of these drugs, raising safety concerns.

Rudolph called the latter "a weak argument" because bills called for restrictions to enhance the drugs' safety.

Pinsky, who also presented a Canadian drug plan, agreed.

"I think that's unfortunate," he said, blaming drug companies for blocking importation, which he said could cut drug prices in half. "The drug industry, their bottom line is money."

Lawmakers will probably re-examine Canadian drug plans next year, Rudolph said.

Despite the lingering status of Canadian drugs and other plans, Hammen and Rudolph said they are content with the General Assembly's work to reduce drug costs.

Now, Hammen said, the federal government should do more.

"I think it's been a very productive session," Hammen said. "A lot of people are going to find comfort knowing these programs exist.

Middleton was more cautious.

"I don't think we've done anything that's going to make prescription drugs more affordable (overall), just more accessible," he said. "We've got a long ways to go."

 

Copyright 2005 University of Maryland Philip Merrill College of Journalism


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