A much-touted proposal to lower prescription drug costs for more than 500,000 Coloradans is raising serious concerns among the state’s pharmacists, who say it would cost them too much to make participation worthwhile.
Lawmakers are modeling some of the program on one in Ohio, which has hurt pharmacists there, an industry official said. Ohio’s program has also fallen well short of projected savings and participation levels.
In Colorado, Republican and Democratic lawmakers, labor officials and drug makers joined last month to announce what was billed as a compromise proposal to provide discounts on prescription drugs for uninsured Coloradans earning less than 250 percent of the federal poverty level, or $50,000 for a family of four, and for those 60 and older.
Eligible individuals would apply for a “Colorado Cares Rx” card online or by telephone. The card would entitle the holder to the same prices state employees pay when purchasing drugs, which are discounted on average about 30 percent.
Participation in the program, however, would be voluntary for drug manufacturers, pharmacists and others.
Conspicuously missing from the announcement last month were pharmacy representatives.
“The state has no plans to set up their own retail pharmacies so we need to be part of the process that makes sense for our bottom line and makes sense for the constituents of Colorado,” said Chris Howes, a lobbyist for pharmacy chains. “Or, our members make a conscious choice not to participate in this program, depriving people who get a discount card from receiving a discount on their drugs.”
Pharmacies are upset because they say most of the savings won’t come from drug manufacturers, but from them.
Between January 2005 and March 2006, Ohio’s program saved its 66,000 participants $4.5 million, according to public records. Of those savings, $388,000 were rebates from drug manufacturers.
However, analysts estimated pharmaceutical companies would have rebated $50 million by last month. Those projections were based on 1.4 million eligible residents.
But about 600,000 of those residents lost eligibility for Ohio’s program when Medicare’s new prescription drug benefit took effect Jan. 1, said Jennifer Lopez, director of Ohio’s Best Rx. The projections also assumed that more people would join the program immediately.
Pharmacists have been hit hard in Ohio because 70 percent of the discounted drugs sold are generic, which means there are no discounts from the drug manufacturers. Pharmacies pay the same price for generic drugs, but have to sell them to plan participants at the lower price negotiated by the state, said Ernie Boyd of the Ohio Pharmacists Association.
“Our pharmacies end up taking the brunt of these price controls, while the guys who are trying to pass the legislation – the brand-name drug companies – are still free to increase their prices whenever they want to,” he said.
Colorado’s proposal, Howes said, is “taking all the profit out of the transaction and handing it to the (the program participant).”
But John O’Brien of Pharmaceutical Research and Manufacturers of America said “the discount that’s being provided by the brand-name manufacturers is significant.”
He pointed to Ohio records that show consumers saved an average of $18 on brand-name prescriptions last month.
“You’ve got to look at what is the bottom line for the patient. The patient in Ohio is receiving discounts between 33 to 34 percent,” said Wanda Moebius, the group’s spokeswoman.
In Colorado, Mark Kinney is concerned that pharmacies won’t participate and consumers will have few places to use their discount cards.
“Why would we market those programs if it’s going to end up costing us money,” said Kinney, who represents 150 independently owned Colorado pharmacies.
But Democratic Rep. Jerry Frangas, sponsor of the proposal, said “that argument is bologna. I’m not an idiot. They make their money on volume.”
Frangas said he plans to offer the proposal as an amendment to House Bill 1252, expected to be heard in committee this week.
Steve Adams of the Colorado AFL-CIO said the discount program would generate new customers who otherwise wouldn’t buy drugs. The increased traffic would drive other sales, he said.
Staff writer Chris Frates can be reached at 303-820-1633 or cfrates@denverpost.com.
