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Maine’s enforced drug discounts top Ohio’s voluntary program

September 29, 2005

New report finds Maine’s enforced prescription drug program
offers deeper discounts than Ohio’s voluntary program

Issue goes before California voters in November; decision could set national trend

Hallowell, ME — An innovative prescription drug program in Maine that gives the state the power to negotiate and enforce discounts with the drug industry has proven to be more effective than a program adopted in Ohio that relies on drug companies to provide voluntary discounts, according to a report released today by Prescription Drug Choices, a nonprofit public policy organization. The report found that Maine’s program provided deeper discounts, benefited more eligible residents, and has been better implemented than the program in Ohio.
Copies of the report are available online at www.policychoices.org
“For too many Americans, the high cost of prescription drugs is a serious roadblock to maintaining good health,” said Sharon Treat of the National Legislative Association on Prescription Drug Prices, one of the report’s authors. “Maine offers a good roadmap for states searching for ways to bring soaring drug prices down and provide additional prescription drug coverage to those in need.”
Similar drug discount programs will be considered by voters on November 8 in California, where consumers groups have sponsored Prop 79, which mirrors Maine’s program, and the pharmaceutical industry has backed Prop 78, which is voluntary like Ohio’s. The pharmaceutical industry has raised nearly $80 million to defeat the enforceable discount measure in California.
The Maine Rx Plus program, implemented in January 2004, relies on a carrot and stick approach to provide drug discounts. On the carrot side, drug company participation in Maine Rx Plus expands their market share as newly enrolled customers can afford to buy more prescription drugs. But in the event that any company refuses to voluntarily provide rebates, the state has the stick — additional bargaining power of putting one or more of that company’s drugs on a “prior authorization” list in the Medicaid program. This enables Maine to shift market share – and profits – to companies with drugs on the state’s “preferred drug list” and away from drugs needing prior authorization. Health providers are asked to prescribe from this “preferred drug list,” unless for medical reasons, a different drug is needed.
“Maine has been able to achieve better savings for consumers than Ohio because it has the power to enforce discounts with the threat of shifting drug purchasing away from companies that refuse to participate,” said Rob Schneider, Director of Consumers Union’s Prescription for Change campaign. “In the end, that means more people can afford the prescription drugs they need to stay healthy.” Consumers Union is supporting Prop 79 in California to bring a similar enforceable drug discount program to the state.
By contrast, the “Ohio Best Rx” program relies solely on drug manufacturers voluntarily offering prescription drugs at discounted prices. There is no tie-in to Medicaid and no provision intended to leverage rebates through prior authorization.
The study found that a greater percentage of the needy population is eligible for coverage in Maine compared to Ohio, and more people have actually signed up and received benefits. As of July 1, 2005, 93,315 Maine residents, or 28.71 percent of those eligible, have been enrolled and 276,380 prescriptions have been filled. In Ohio, 25,437 residents, or just 1.82 percent of those eligible, have been enrolled and 65,034 prescriptions have been filled.
When it came to price, the study found that Maine Rx Plus provides excellent value. The study
looked at July 2005 prices for 36 commonly prescribed prescription drugs and found:
• On average, generic drugs purchased in a pharmacy in Maine are 50.90 percent less expensive than the usual cash price if a Maine Rx Plus card is used.
• Brand name drugs purchased in a pharmacy are, on average, 25.77 percent less expensive than the usual cash price if a Maine Rx Plus card is used.
• The average Maine Rx Plus in-pharmacy price for generic drugs was 30 percent less than the Ohio’s Best Rx in-pharmacy price.
• The average Maine Rx Plus in-pharmacy price for brand name drugs was seven percent less than the Ohio’s Best Rx in-pharmacy price.
“We’ve heard from a number of seniors that they have been able to get their prescriptions through Maine Rx Plus for a price comparable to what they have paid in the past from pharmacies in Canada,” said Neena Quirion, Executive Director of the Maine Council of Senior Citizens. “They have been so thankful for the Maine program because it’s made it so much easier for them to get more of the prescriptions they need at an affordable price.”
The results of the price comparison study are particularly striking because the average Maine cash retail price before the discount is applied is 9.9 percent higher than in Ohio. The Maine prices also do not reflect supplemental rebates that have been negotiated but not yet calculated into the value of the discounts. These rebates are expected to further reduce prices for about 200 drugs by another 7 to 40 percent off the usual Maine cash retail price.
“Our coalition in Ohio tried to get a program like Maine’s, but the pharmaceutical industry tied us up in court, so we settled for Ohio’s Best Rx,” said Cathy Levine, Executive Director of Universal Healthcare Action Network of Ohio, a statewide nonprofit organization working for affordable healthcare for all. “The results, thus far, are disappointing. Manufacturer discounts and the number of consumers being helped have both fallen short of what proponents had promised.”
Prescription Policy Choices is a nonprofit public policy organization engaged in education and research on prescription drug issues.
CONTACT: Sharon Treat,Prescription Policy Choices, 207-622-5597
Rob Schneider, Consumers Union, 914-378-2208
Earl Lui, Consumers Union, 415-431-6747