Stateline Story

RX Costs To Top State Agendas In 2001, Experts Say

CHARLOTTE -- Access to prescription drugs will be the number one issue before state legislatures in 2001, according to participants at the fourth annual National Health Policy Conference.

The conference, which took place in Charlotte, N.C. last weekend, brought together nearly 400 lawmakers, lobbyists, legislative staffers and health policy officials from more than 40 states, one territory and the District of Columbia. It was sponsored by the National Conference of State Legislatures (NCSL).

Issues on the agenda included maintaining rural hospitals, dealing with nursing shortages and developing policies governing the use of genetic technology. But the topic that got the most attention was how states will respond to political pressure to address spiraling prescription drug costs.

Uwe Reinhardt, a Princeton University professor and renowned health economist, said providing access to prescription drugs is a problem that will only get worse "because if you look at total national spending on prescription drugs, the trend [line] is going up."

In the next eight years, the U.S. Health Care Financing Administration (HCFA) estimates that the amount of state and local tax money devoted to drug spending outside of Medicare and Medicaid will more than double--from $10 billion to $24 billion.

Can America afford prescription drugs? "Collectively, we can," said Reinhardt. "As individuals or families, [however], often we cannot." Spending is highly concentrated among the chronically ill and the elderly, for example. In addition, for the low-income uninsured, "everything is a problem," including things like paying to repair a flat tire, he said.

Among the solutions Reinhardt proposed: establish an independent research center to find out whether the constant flow of new drugs to the market brings benefits that outweigh the costs. Replacing old but effective drugs with more expensive new ones that are said to be more effective currently correlates with an estimated 39 percent of the increase in drug spending by consumers.He also predicted that within the next few years, more and more employers will adapt a payment system modeled on one in place in Germany, in which drugs are categorized by therapeutic class. Health insurers pay a $20 flat rate for medications, and consumers pay the remaining difference.

In the United States, insurers use a tiered system and end up shouldering more of the cost of expensive drugs.)

Reinhardt said state lawmakers should "kneel on the new President" to get a prescription drug program in place for the elderly. Should that occur, "in five years, no American would have to go without" needed pharmaceuticals," he said.

Texas Gov. George Bush has said that one of his first priorities as president would be to give federal money to the states to create or expand prescription drug benefits for older Americans. Vice President Al Gore has also promised a prescription drug plan for the elderly, but Gore would provide benefits by expanding the federal Medicare program.

Tags: Health