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2 Drug Discount Measures in a Duel

Prop. 78 is backed by pharmaceutical firms, Prop. 79 by consumer and labor groups. Each side says its formula has worked elsewhere.

October 18, 2005|Lisa Girion | Times Staff Writer

In Maine, bus trips to Canada for cheap prescription drugs aren't as popular as they once were -- thanks to a new drug discount plan for the poor.

Since it took effect in 2004, the program has pushed retailers and pharmaceutical companies to cut prices substantially for eligible residents, reducing demand for the cross-border bargain-hunting excursions.

But though Maine's approach is winning praise from consumer groups, the pharmaceutical industry points to another discount program in Ohio as the real success story.

That program, because it is voluntary for drug companies and did not attract legal challenges that dogged the effort in Maine, was launched more quickly, backers say.

In California, those two states' plans are being held up as examples in the debate over Propositions 78 and 79, dueling drug discount initiatives on the Nov. 8 ballot. Both campaigns tout Maine and Ohio as models that California should follow.

Pharmaceutical companies and consumer groups disagree over what the Maine and Ohio experiments demonstrate. But this much is clear: Maine's plan reaches a far greater share of the state's needy residents -- and it appears to give them better prices in the drugstore.

One indication of the Maine program's success is that participation in bus trips to Canadian pharmacies sponsored by the Maine Council of Senior Citizens is half what it was a couple years ago.

"Seniors who had signed up for a bus trip were able to get prescriptions ... for what it cost them in Canada," said Neena Quirion, director of the senior citizens consumer group.

Called Maine Rx Plus, the program resembles California's Proposition 79, a measure backed by consumer and labor groups that would set up a drug discount system for low-income residents and allow the state to steer business away from drug companies that don't participate.

Proposition 78, like Ohio's Best Rx, is backed by the drug industry. It sets stricter eligibility rules and makes participation voluntary for drug makers.

Although the programs in Maine and Ohio are out front, California -- by virtue of the size of its drug market -- could set a national trend.

With stakes that high, pharmaceutical companies are paying to promote Proposition 78 and defeat Proposition 79, raising more than $80 million for the campaign at last count.

The pharmaceutical industry "is investing so heavily in California to defeat this because if California goes, a lot of other states could go," said Geoffrey Joyce, a senior economist with the Rand Corp., a think tank in Santa Monica. "It's just a huge market, and it's symbolic."

A Field Poll survey last month found both measures leading, though support for Proposition 78 dropped sharply after respondents learned it is backed by the pharmaceutical industry. Should both be approved, the measure with more votes would take effect.

Since even the experts admit it is impossible to know exactly how well either ballot measure would serve needy Californians, the two campaigns are eager to fill in the gaps with competing analyses of the programs in Ohio and Maine.

Partisans on each side of the battle line have conducted studies comparing the states' plans -- and, not surprisingly, they draw opposite conclusions.

The Pharmaceutical Research and Manufacturers Assn., a Washington, D.C.-based trade group, says a survey it commissioned proves Ohio's plan is better. The survey found that Ohio's Best Rx prices are on average 20% cheaper than Maine Rx Plus for 20 commonly prescribed drugs.

But critics have complained that the survey used estimated prices for Maine, calculated by applying discounts to cash prices reported by pharmacies.

Another study was conducted by Prescription Policy Choices, a Maine group, with backing from Consumers Union. It compared 36 commonly used drugs, using prices obtained from the operators of each state's program.

It found that generics purchased in stores with a Maine Rx Plus discount were 30% cheaper than Ohio's Best Rx in-store prices. Name-brand drugs purchased through the Maine program in stores were 4.45% cheaper than the same drugs purchased in stores participating in Ohio's Best Rx.

The Maine Heritage Center, a conservative think tank, conducted a third study using the consumer group's data. It concluded that though in-store prices might be lower in Maine, mail-order prices under Ohio's Best Rx were cheapest overall. Those bargains were of little use to Ohio plan enrollees, however, since fewer than 2% of them buy drugs by mail.

A comparison of the total cost of 36 common drugs shows the variation among the plans. Although Ohio's Best Rx mail order price was lowest at $4,533, that state's in-store tab was highest -- $4,998. Maine Rx Plus enrollees could buy the same basket of drugs in participating stores for $4,758 and by mail for $4,708.

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