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Drug discount bill off to quick start
by Tom Scheck, Minnesota Public Radio
February 12, 2003

A key House committee has approved a bill that would provide prescription drug discounts for up to 70,000 Minnesotans. Supporters of the bill say it would provide an added boost to seniors who are struggling to pay for prescription drugs. Opponents say it imposes unnecessary government price regulation.

St. Paul, Minn. — The Minnesota House Health and Human Service Policy Committee overwhelmingly approved the prescription drug bill on a 16-1 vote. The issue has been prominent on both the state and national level in recent years. Many seniors on Medicare said the high cost of prescriptions often forced them to choose between buying drugs or buying food.

Rep. Fran Bradley, R-Rochester, says his bill would help. It would provide a discount of up to 20 percent for people who make less than $22,000 a year. "This is anybody who does not have coverage, health insurance coverage for prescription drugs."

Bradley says the Department of Human Services would run the discount program. Pharmacists would provide discounts to qualifying participants. The state would reimburse the pharmacist and charge the drug companies for the discount. He says plan would create bulk discount rates similar to ones negotiated by large HMOs.

"It opens the door for them to access rebates and specifically the rebate level. They get a discounted price. When they qualify for this program they would go into their pharmacy that is participating and they would purchase their drugs at the same price as people who are on Medicaid would purchase them," according to Bradley.

Bradley says the program would need $6.5 million in start-up money. He says it would fund itself over time.

A number of groups testified against the bill. Carolyn Jones with the Minnesota Chamber of Commerce says she was concerned that drug companies may try to make up their losses by raising prices for other customers. She says private businesses could see increases to their health care bill. "You will see private payers pay higher as a result of government establishing lower prices," she said.

The Pharmaceutical Researchers and Manufacturers of America sued other states for implementing a similar law. The organization's Marjorie Powell told Minnesota lawmakers the issue of controlling prescription drug costs would best be done on the national level. She says a variety of different state laws will cause problems for individuals and drug companies.

"It ends up balkanizing the health care available to seniors and the disabled then working with a program that the federal government would establish that would be available to all seniors and disabled nationwide," Powell said.

The Minnesota bill is somewhat similar to legislation that passed in Maine. The U.S. Supreme Court is currently reviewing that law after PHRMA brought a lawsuit against the state. They claim it's unconstitutional under the commerce clause.

Representative Tim Wilkin, the only lawmaker to vote against the bill, expressed concern that the state could end up in a costly court case. Other opponents testified that the bill would take money away from research and development.

Those arguments didn't sway committee members. Rep. Tom Huntley, DFL-Duluth, says the bill would give lower income residents a chance to pool their resources to buy prescription drugs.

"Ms. Powell talked about how Rep. Bradley's bill would balkanize the system. I think it does the opposite. It unbalkanizes the system. What's more balkanized than individuals having to go out with no economic clout and try to compete with the pharmaceutical companies?" Huntley said.

Similar legislation stalled in the House last year. Bradley says he's confident it will pass this year. The bill now moves on to the House Health and Human Services Finance Committee.

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