Illinois Set to Discount Rx Drugs for Seniors

Illinoisans over the age of 65 or who are disabled may soon enjoy steep discounts on their prescription drugs under a discount program that’s similar to an ambitious Maine initiative, Maine Rx, that was given a green light May 19 by the U.S. Supreme Court.

Democratic Gov. Rod Blagojevich signed the drug law Monday (6/16), setting in motion a plan that supporters liken to a discount store for prescription-buying consumers.

With the governor’s approval, Illinois joins a growing list of states that use bulk purchasing power to negotiate lower prescription drug prices from drug makers. The Court’s ruling in Maine Rx will likely embolden other states to design similar programs, analysts say. In fact, 18 states are considering comparable, state-run discount drug programs, according to the National Conference of State Legislators, although the legislatures in several of those states have already adjourned for the year.

“For far too long, seniors in our state have had to choose between paying for the medications they need and being able to live the lives they’ve earned. They shouldn’t have to make that choice,” Blagojevich said in a press release announcing the bill signing. The approach lawmakers in Springfield came up with could enable an estimated 450,000 Illinoisans to trim between 60 and 80 percent off what they now pay for full- price prescriptions. The program is open to any Illinoisan over 65, regardless of income. Participants would have to pay $25 annually, enough to offset the state’s expected cost of running the plan.

Taking advantage of rebates typically offered to the managed care industry and government health care programs that buy drugs in bulk, Illinois would negotiate rates with pharmaceutical companies. Enrollees would be guaranteed a ceiling on what they would have to pay for drugs, a factor that promises to hold great allure at a time of galloping inflation in prescription drugs.

“This has the potential of bringing meaningful relief, but a lot of that depends on the state to negotiate meaningfully,” said Donna Ginther, a lobbyist for the American Association of Retired Persons, which helped pass the Illinois bill this spring.

As one example, backers of the plan estimate the state should be able to broker dramatic discounts on the popular anti-stroke medication, Ticlid. Participants in the program would pay $14.85 instead of the average retail price of $80.35, according to state estimates.

“For the vast majority of senior citizens in Illinois, there’s no help to get prescription drugs if you make more than $21,000 if you live by yourself or make $28,000 as a couple,” said state Rep. Jack Franks (D-Woodstock), the plan’s lead House sponsor, citing the income ceilings for the state’s drug-assistance program, Circuit Breaker.

“What we found in our state is not only with the increase in the cost of prescriptions up over 30 percent over a few years, there are many more prescriptions being written for our seniors. They account for 12 percent of our population but purchase about 37 percent of prescription drugs. Put that together, we can harness their market power,” he said. Franks, a Democrat who represents a heavily Republican legislative district northwest of Chicago, has introduced similar legislation for the past four years. His plan always passed the Democratic-controlled House. But because of his perennial status as a GOP target, the initiative became mired in the Republican-led Senate. Publicly, Frank’s precarious political status was never the explanation for the hold-up. Instead, Senate Republicans justified their opposition by focusing on the price tag for the state to administer the plan, $27 million annually.

“We worried about the bureaucracy and the cost of putting it together,” said Patty Schuh, a spokeswoman for Senate Minority Leader Frank Watson (R-Greenville), the General Assembly’s only pharmacist.

When Democrats swept control of the governor’s office and both houses of the Legislature last fall, Franks’ initiative took on a political life of its own. Former Republican critics voted en masse for the drug bill, not wanting to be perceived anti-senior in one of the spring session’s most politically vital votes. The measure didn’t encounter a single “No” vote in the House or the Senate, where Sen. Debbie Halvorson (D-Crete) was the lead sponsor.

“This has consumed me for four years,” Franks said. “Unfortunately, people played politics with it. A lot of seniors had to wait for this because of petty games under the dome.”

Working on behalf of the measure were labor unions, consumer groups, the AARP, pharmacists and the Illinois Retail Merchants Association.

The only entity not on board was the Pharmaceutical Research and Manufacturers of America, which represents brand-name drug makers. A past opponent of the bill, it wound up shifting to a neutral position after getting a key concession as the bill made its way through the Illinois Legislature.

Franks and Halvorson did not specifically clump the state’s Medicaid program into the discount drug initiative, fearing such a step could lead to lawsuits from drug makers, as was the case in Maine. Earlier efforts by Franks did just that under the theory it would give Illinois greater price leverage in its negotiations with drug makers.

“This once was a program that would try to leverage Medicaid to get automatic discounts and use poor Medicaid patients as hostages, and we were adamantly opposed,” said Jeffrey L. Trewhitt, a spokesman for the drug-maker association. “This is a much better alternative. This is based on marketplace negotiations, and we couldn’t ask for more.” But with a spring U.S. Supreme Court ruling supporting the Maine program, Franks now acknowledges that concession may be short-lived. “If the Supreme Court has ruled on this now, even though it’s not explicit in our bill, I still think we can negotiate.”

Once Blagojevich signs the bill, it takes effect July 1, but politically, its rewards could spill well beyond that date, smack into next year’s legislative campaigns.

“We delivered on what we promised, and it’s something we’ve been fighting for for a long time and that the Republicans were fighting against,” Franks said. “In the end, it came down to who are you with? With your seniors or protecting the profits of multi-national pharmaceutical companies?”