Proposed Bill Would Allow State Negotiations for Prescription Drugs

August 1, 2007

Rep. Chris Van Hollen (D-Md.) plans to introduce legislation this week that would give states the authority to negotiate for prescription drugs for poor citizens with limited or no insurance coverage, according to the lawmaker’s office.

Specifically, the bill would allow states to set up programs and utilize their negotiating authority with drug companies to garner the same kinds of savings they do for participants in the Medicaid program. The only criteria would be state citizenship for participants with income levels up to 300 percent of the poverty line, Marilyn Campbell, Van Hollen’s press secretary, said.

Under the proposed bill, participants would receive discount cards to use at pharmacies. In addition, states could encourage industry participation by conditioning company participation in the state’s Medicaid program on that same company’s participation in the state discount prescription drug plan, Campbell said.

According to Campbell, most people with existing coverage will get a better deal on their prescription drugs and would likely not choose to participate in the program the bill would create. “But lack of insurance coverage is not an eligibility requirement under our bill for the reason that some citizens in some circumstances could benefit — think Medicare Part D beneficiaries who fall into the doughnut hole, for example,” she added.

The Pharmaceutical Research and Manufacturers of America (PhRMA) expressed opposition to the bill, saying it failed to address the root problem. PhRMA Senior Vice President Ken Johnson said prescription drug cost savings could be better addressed through greater coverage from competing private insurance plans.

“Proposals calling for government imposed price controls on medicines — like the one Rep. Chris Van Hollen may soon introduce — could potentially restrict patient access to medicines and do not address the underlying issue of insurance coverage, and the lack of it, for millions of patients in America,” Johnson said. 

No specific date has been set for the bill’s introduction. — Steve Brown