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Walko bill targets rising prescription drug prices
Thursday, April 20, 2000 By John M.R. Bull, Post-Gazette Harrisburg Correspondent
HARRISBURG -- Skyrocketing prescription drug prices call for drastic action, a state lawmaker said yesterday in announcing a bill that would impose sweeping price controls on medications sold in the state.
"Inflated pharmaceutical prices are a financial burden that many individuals, particularly seniors, cannot afford," said state Rep. Don Walko, D-North Side. "It is time to stop the inexcusable price-gouging by the pharmaceutical industry."
His bill was spurred by consumer surveys that showed Pennsylvania's senior citizens who aren't covered by insurance plans pay double, on average, what the pharmaceutical industry charges insurers for the 10 most commonly prescribed drugs for the elderly, and in some cases 231 percent more. That means the bottle of pills that an insurer buys for $10 and provides to its members for a $2 or $5 co-pay costs the uninsured consumer $20.
The measure, which will be formally introduced in the House in two weeks, has little chance of passage this year.
But it likely will be joined by other proposals from both Democrats and Republicans, who take seriously complaints from constituents about the spike in prescription drug costs.
"It's a very serious issue," said Stephen Drachler, spokesman for House Majority Leader John Perzel, R-Philadelphia.
He noted that both the state House and Senate have seated task forces to study the issue and take testimony. At least three public hearings have been held in the last two months. More are scheduled.
"It's better to look at it seriously instead of taking a knee-jerk reaction to it," Drachler said. "We are in the process of doing that. There's potential for a lot of ideas that could help people."
Walko's proposal basically sets the table for what will be a long, drawn-out debate over the next six to 12 months.
"I understand completely this will be a tough and contentious issue," Walko said. "It will be a long-haul issue."
Both Democrats and Republicans agree there is a problem, but they are far from clear on what the answer may be. Walko's bill is considered extreme by some Republicans, the party that controls both the state House and Senate.
Stephen C. MacNett, general counsel for Senate Republicans, said senators likely won't take up any specific legislation on the issue until the end of the year, as data is gathered and analyzed in the meantime.
"I think you have a Senate that's very anxious for suggestions for this," he said. "We're looking at getting them."
Walko's bill would establish the Fair Drug Pricing Board, a 15-member body that would review prescription drug prices throughout the state and mandate that prices be no higher than the rates negotiated by the federal government for its Department of Veterans Affairs, Department of Defense, Public Health Service, Coast Guard and Indian Health Service.
The pharmaceutical industry opposes price-control legislation of any kind, saying it would cut into research and development funds, which could jeopardize bringing new life-saving medications to the marketplace. And it would not fix the problem.
"It's a bad bill. It's a very bad bill," said Jeff Trewhitt, spokesman for Pharmaceutical Research and Manufacturers of America, an industry trade group. "Price controls don't address the crux of the problem, and that's [insurance] coverage. Sad but true, most of the people couldn't afford the price control prices."
Because the federal Medicare program does not cover prescription costs for the elderly, except if dispensed in the hospital, millions of seniors are without prescription coverage nationwide. Therefore, it's up to Congress to do something, and prevent "patchwork" laws from state to state, said Trewhitt.
Congress' seeming reluctance to act has spurred prescription price-control laws in Arizona, Vermont, Illinois and New York.
Walko's bill mirrors legislation passed last week by Maine's legislature, whose members were barraged by constituent complaints that prices were 30 percent higher than in nearby Canada. Canada negotiates directly with the pharmaceutical industry and receives lower prices for its socialized medicine plan.
As a result, Maine residents who live near the border often bus to Quebec to buy their prescription drugs.
"They are the same drugs, from the same companies, but the only difference was the labels were in French -- and they were 30 percent cheaper," said Maine Senate Majority Leader Cellie Pingree, a Democrat who attended Walko's announcement yesterday.
"The pharmaceutical industry is the most profitable industry in the country, bar none" with profits at $24 billion, after 30 percent is spent on research and development and 20 percent on marketing, said Pingree.
"Furthermore, not only are prescription drugs more affordable across the border, it is cheaper to purchase the identical medication for your pet than for yourself," she said.
Prescription prices are growing at an annual rate of 22 percent, and that's something the state General Assembly must do something about, but just what isn't entirely clear yet, said state Sen. Tim Murphy, R-Upper St. Clair.
The state's PACE program, which uses lottery proceeds to pay most of the prescription costs for eligible low-income seniors, is growing at an alarming rate, and jeopardizing other programs paid with lottery profits, he said.
"We're looking at some kind of train wreck coming here," he said. "If costs keep going up at this rate, something is going to have to go."
There are a variety of potential fixes, but such a complex issue could result in legislation that causes more problems than it cures if lawmakers are not careful, Murphy said. He said he would ask the Senate next month to approve an in-depth, six-month study of prescription prices and other medical issues that may be associated.
For example, Murphy said, if prescription prices are capped in Pennsylvania, would that force the pharmaceutical industry to raise prices in other states, or for insurance plans in this state?
Would a ban on advertising prescription drugs in Pennsylvania allow the industry to reduce prices? he asked.
Would such a move cut down the number of doctors who write unnecessary prescriptions for insistent patients who were influenced by advertising? Murphy wondered.
"We need a clear and intense review of this," he said. "This is not a simple issue."
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