SACRAMENTO — Gov. Arnold Schwarzenegger's plan to cut prescription drug costs by asking pharmaceutical makers for voluntary discounts probably won't work as well as a tougher approach touted by legislative Democrats, an independent analysis concluded Thursday.
Assembly Democrats hailed as "vindication" a review of the governor's plan by the legislative analyst's office. But the Schwarzenegger administration said it would not change course.
With political leaders looking far and wide for ways to cut healthcare costs and still stretch a safety net beneath the state's 6.4 million residents without health insurance, two Assembly members Thursday unveiled a plan to require all Californians to buy health insurance, much as drivers must by law carry auto coverage.
Their proposal intensifies a debate that gets more urgent each month as hospitals close and prescription drugs and health insurance premiums get so expensive that many Californians choose to do without.
Though the Republican governor hasn't backed a specific plan to help the uninsured, his administration has endorsed a bill that would give a discount drug card to uninsured people who earn less than $28,000 a year, or $56,600 for a family of four.
Called "California Rx," the program hinges on drug companies' agreeing to offer medications at the same discounted price they give large buyers such as Blue Cross. Sens. Deborah Ortiz (D-Sacramento) and Chuck Poochigian (R-Fresno) are coauthors of the proposal, SB 19.
The discount plan, with cost breaks projected to save about 40%, could be implemented quickly and without legal challenge, concludes the legislative analyst's office, which gives nonpartisan policy advice to lawmakers.
But bigger discounts on more types of drugs could be attained, the report states, if the state issued this ultimatum to drug companies: Give us discounts for the California Rx program if you also want to sell your drugs easily through Medi-Cal, the state-run program that spends $4 billion a year buying drugs for roughly 7 million of the elderly, the disabled, and poor children.
Maine took such an approach, and although drug company lawsuits blocked its drug discount program for several years, courts eventually upheld it. According to the legislative analyst's report, Maine has negotiated discounts of up to 60% below retail prices for 200 drugs.
Iowa tried the voluntary approach endorsed by Schwarzenegger and only three of 20 drug companies agreed to participate.
