Michigan and Vermont figured out a way to save money on the cost of prescription drugs purchased by those state's Medicaid programs. By joining together to increase their buying power, the two states were able to negotiate lower prices for the medicines they purchased.
The Bush administration seems to think reducing the cost of prescription drugs is a bad thing:
The Bush administration rejected a program that saved Michigan and Vermont millions of dollars by allowing them to negotiate jointly lower prescription prices from drug companies, Michigan Gov. Jennifer Granholm said Monday.
The two states were the first to pool resources for buying drugs under the state-federal Medicaid program that provides health care to the poor. Other states, including New Hampshire and South Carolina, were considering joining.
Granholm, a Democrat, told the Associated Press that the federal Centers for Medicare and Medicaid Services rejected the program late Friday on grounds it violated federal procurement procedures. Eileen Kostanecki, Granholm's health care adviser in Washington, said Medicaid officials told her to expect an official rejection letter next month. …
Kostanecki said Michigan saved about $40 million in drug costs through the program in 2003, including $8 million from multistate bargaining. Neither Michigan nor Vermont knows whether it will be allowed to collect on the discounts they're owed if the program should end, she said. …
Granholm … said she was surprised by the decision because the Bush administration has encouraged states to cut drug costs.
This news came out on the same day as the results of an AP/Ipsos poll that found, as AP writer Will Lester reports:
Almost a third of Americans say paying for prescription drugs is a problem in their families, and many are cutting dosages to deal with the crunch, according to a poll by the Associated Press. …
The poll conducted for the AP by Ipsos-Public Affairs found most Americans either take prescription drugs or someone in their family does. Of those, 33 percent said their families have trouble paying at times. …
The high cost of prescription drugs will be an important issue in the presidential campaign, said eight in 10 in the poll. Almost half said it will be "very important."
That last point might seem like good news for the Bush administration. After all, they just bullied a budget-busting Medicare prescription drug benefit through Congress. Why, this bill was such a high priority for the Bush administration that they went so far as to mislead Congress as to its full cost in order to ensure its passage.
Unfortunately, Bush's Medicare bill also made illegal two common-sense cost-saving steps that the AP has learned are rather popular:
In November, Congress passed a Republican-written Medicare prescription drug benefit that goes into effect in 2006. …
Two popular steps that could have made prescription drugs more affordable were forbidden by the new law:
–Letting Americans import drugs from Canada, Mexico and other countries, an idea supported by 65 percent of those polled for the AP.
–Giving the government authority to negotiate with pharmaceutical companies for lower drug prices, favored by 71 percent.
I appreciate that there are arguments against the first proposal, although I'm not sure what to make of them. In any case, importing drugs from Canada does not strike me as a viable long term solution.
But what earthly reason is there for prohibiting the government from using its clout as a massive consumer to negotiate for lower prices? What is the procurement logic that says purchases must be made at the highest price demanded by suppliers?
Is there a charitable interpretation I'm missing here? Or is this really, as it appears, a brazen subsidy for the pharmaceutical industry at the expense of taxpayers and the common good?
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