Bill Would Let States Force Drug DiscountsProposal Aimed at Low-Wage Workers Could Offer Challenge to Bush Policies
By Lisa Rein
Washington Post Staff Writer
Sunday, July 29, 2007; A07
U.S. Rep. Chris Van Hollen is preparing legislation that would allow states to make prescription drugs more affordable for low- and moderate-income Americans, a challenge to Bush administration policies that have thwarted such efforts in Maryland and elsewhere.
Van Hollen (D-Md.) said he will introduce a bill early this week allowing states to use their purchasing power to require drug companies to provide discounts on medications for low-wage workers. Under the proposal, states could negotiate the same breaks they get for people on Medicaid, the state-federal health-care program for the poor.
The savings -- about 40 percent on the retail price -- would be passed on to those with no drug coverage and incomes less than three times the federal poverty level, which is $10,210 for an individual or $20,650 for a family of four. Patients would get discount cards to present at their pharmacies. States could penalize nonparticipating drug makers by making their medicines less available.
Those with insurance but with limited or no prescription drug coverage could participate. The program also would cover elderly residents on Medicare whose coverage runs out.
The proposal is modeled on a bill introduced by Sen. Paul D. Wellstone (D-Minn.) shortly before he died in a plane crash in 2002. The bill then languished in committee.
Maryland and a handful of other states, including Maine, Vermont and Minnesota, have tried in recent years to address rising costs with laws forcing drug makers to cut prices. About 40,000 Marylanders would benefit from the discount under a law signed by then-Gov. Robert L. Ehrlich (R) in 2005.
But the price breaks were challenged by the pharmaceutical industry and blocked by the Bush administration. The Department of Health and Human Services denied Maryland's application for a Medicaid waiver on the grounds that the state was not going to provide enough money toward the cost of the discount.
John Folkemer, the state's Medicaid director, said the federal government asked for a contribution of 15 percent, which state officials said was unrealistic.
A spokesman for the Centers for Medicare and Medicaid Services, which denied waivers to Maryland and other states, said the agency would not comment on Van Hollen's bill until it is introduced.
A spokesman for Pharmaceutical Research and Manufacturers of America, a trade group representing the drug industry, declined to comment on the bill. More generally, drug manufacturers say they are concerned about excessive government regulation of drugs and the potential for price controls.
Van Hollen said the waiver was denied "for reasons I don't think anybody found credible."
The discount would benefit "a group that's often forgotten," the three-term congressman said. His stature is rising on Capitol Hill, with a seat on the powerful House Ways and Means Committee and his appointment last year as the House Democrats' chief recruiter and fundraiser.
The bill is likely to be a factor in the battle over health care between Democrats and President Bush, who has threatened to veto Democratic initiatives to expand insurance coverage for low-income children and cut Medicare payments to private health plans.
As Congress and presidential candidates consider ways to help the uninsured, broader health coverage has eluded Maryland. A law requiring Wal-Mart and other large employers to provide health insurance was struck down in the courts this year. And an ambitious plan to extend Medicaid to 200,000 low-income residents, offer subsidies to small businesses to provide coverage and require insurance companies to offer a bigger menu of policies at affordable premiums died in the General Assembly this winter, a victim of the state's budget shortfall.
Maryland House Speaker Michael E. Busch (D-Anne Arundel), who was behind the health-care expansion, said the Van Hollen bill "would have an immediate effect for people classified as the working poor."
"They're trying to make ends meet to pay for their homes, their utilities, their cars," he said. "Many people without drug coverage just do without care."
Maryland offers Medicaid coverage only to those earning 40 percent or less of the federal poverty level, creating an additional burden for paying for prescription drugs, say supporters of the discount plan.
"We think this should be a wake-up call to the Bush administration," said Vincent DeMarco, president of the Maryland Citizens' Health Initiative, an advocate for broader health coverage. "It would be easy to let us do this."
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