Posted on 08/24/2006 6:14:54 PM PDT by NormsRevenge
SACRAMENTO - Giving an election-year boost to millions of lower-income Californians, Gov. Arnold Schwarzenegger and legislative Democrats reached a deal Thursday that will require prescription drug companies to offer set discounts for medications or face possible sanctions.
The California Prescription Drug Initiative will give discounts of about 40 percent for name-brand drugs and 60 percent for generics to people who otherwise would have to pay full retail price. The enrollment fee will be $10 a year.
The plan, announced earlier this week but formally approved Thursday, will affect more than 5 million uninsured, lower-income individuals, Schwarzenegger said in a statement.
The governor said the plan will provide "meaningful prescription drug discounts for the hardworking Californians who pay the most for their lifesaving medications, but can afford it the least."
The agreement will be amended into an existing bill by Assembly Speaker Fabian Nunez, D-Los Angeles, and must be acted upon before the legislative session ends next week.
Drug companies, which oppose the plan, will have until Aug. 1, 2010, to comply voluntarily. The extra years will give the state Medi-Cal program time to implement the enforcement tools needed to maximize participation, Schwarzenegger said.
If the companies fail to meet the benchmark discount levels, they face being taken off the preferred drug list used by Medi-Cal, which provides about $4 billion in drugs annually to the poor and elderly.
Schwarzenegger initially opposed the idea of imposing penalties but agreed to the provision last month. He said sanctions could be imposed only if they did not cost the state extra money and if the plan was approved by the Centers for Medicare and Medicaid Services, part of the U.S. Department of Health and Human Services.
Democratic lawmakers made some concessions of their own during negotiations over the past few days.
They agreed to limit the discounts to households that make up to three times the federal poverty level, or about $60,000 a year for a family of four, instead of the $66,000 Democrats had been pushing for.
But the deal does allow coverage for an additional 400,000 poor people who receive Medi-Cal but have to pay for part of the program's cost.
Nunez called the measure "long overdue."
"No Californian should ever have to choose between buying their prescription medicine or putting food on their table," he said in a statement issued Thursday.
Median-income people with high medical bills not covered by their insurance plans might also be able participate in the program. A family of four with an annual income of up to $68,310 and with significant unreimbursed medical expenses will be eligible.
The program also will cover those in the so-called Medicare "doughnut hole." Medicare recipients whose annual drug bills have exceeded $2,251 currently have to pay out-of-pocket for their drugs until they reach $5,100 in annual drug costs.
The Pharmaceutical Research and Manufacturers of America, the drug industry's powerful Washington-based lobbying group, called the plan "bad news for all patients."
"This new program would use the state's sickest and poorest patients as negotiating tools to extend a special price reserved for Medicaid patients to those who do not qualify for that program," said Senior Vice President Ken Johnson in a statement Thursday afternoon.
Medicaid is the state-federal health care program for the poor, blind and disabled.
Assembly Republican leader George Plescia of La Jolla also criticized the deal, calling it a "heavy-handed approach" that could have a number of harmful consequences, including the loss of medications for Medi-Cal recipients.
"By forcing companies to cut drug prices through price controls, which is the practical effect of this measure, we will jeopardize the development of lifesaving drugs for all 35 million people in our state, drive up health insurance costs for all insured Californians and threaten the jobs of thousands of highly skilled workers in this critical industry," he said in a statement.
Thursday's deal was a sort of compromise between two prescription drug bills rejected by voters during last year's special election.
Proposition 78 supported by Schwarzenegger and the pharmaceutical industry would have given drug companies the option of participating in a steep drug discount plan for low- and moderate-income individuals.
A rival measure, Proposition 79, would have made such discounts mandatory for drug companies that wanted to participate in Medi-Cal. It was backed by consumer groups and organized labor.
Since 1994, prescription drug costs have increased an average of 8.3 percent annually nationwide, according to a June report by the nonprofit Kaiser Family Foundation of Menlo Park.
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On the Net:
Read the bill, AB2911, at http://www.assembly.ca.gov
There is NO END to this socialization and pandering to the illegals.
Get ready to read more of this.
The Austrian's greatest, single accomplishment, since taking office, has been to emasculate the influence of elected, Republican legislators in Sacramento
Well heck! No Californian should ever have to choose between buying gasoline or anything else and putting food on their table!!! Government must be there for EVERYTHING IMAGINABLE from cradle to grave!!!
Now Californians will have to go to Mexico to buy their drugs.
And here I thought Schwarzy believed in the principles of Milton Friedman, like limited govt and free markets, and not just more social engineering. The Govinator needs to join the Democratic Party and complete the cycle.
I believe that myth was dispelled long ago.
I believe you're right. Guess my sarcasm wasn't that obvious.
Why stop there? Why not require supermarkets to offer government set discounts on groceries? Require gas stations to offer government set discounts on gasoline? Require real estate agents to offer government set discounts on housing rentals and sales? Require department stores to offer government set discounts on clothing and many other household items? Hey, it's that easy, right?
And give the drug companies enough time to flee the state.
Si! Hasta La Vista, Baby!!!
Why should we have him bach???
I am upset that a so-called Republican would do this.
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