Summary of Agreement between
the Coalition for Affordable Prescription Drugs and PhRMA
9/23/03
by Cathy,

The Coalition for Affordable Prescription Drugs, which gathered 143,000 signatures last year to put a discount program on the ballot, has reached agreement with the pharmaceutical industry's trade association, PhRMA, on a discount program to help many, but not all, uninsured Ohioans. The coalition named it "Ohio's Best RX," because it promises to offer the best discounts in the nation of any plan without public funding and it is the first plan of its kind to deliver significant discounts to all seniors, as well as many non-elderly people.

The coalition, which includes Ohio AFL-CIO, AARP, Ohio Council of Churches, Ohio United Way, Ohio League of Women Voters, UHCAN Ohio, SEIU/119 and others, will not withdraw the ballot initiative until the proposal is signed into law by the Governor. The settlement still has to be drafted as a bill, be approved by the Ohio General Assembly and the Governor, and then go through rulemaking, before the program gets enacted. 

As drafted, "Ohio's Best RX" program will provide discounts to all Ohio residents 60 years and above who lack prescription coverage, regardless of income, and to all other Ohio residents who have not had prescription coverage for four months and with family income at or below 250% of the federal poverty level (roughly $30,300 for a family of 2; $46,000 for a family of 4). Enrollees will pay the discounted price plus a $3.00 pharmacy fee.

If the program is implemented as planned, the discounts may equal or exceed those available through our original proposal. The plan may provide discounts estimated roughly at 25-40% off retail, by:

Using the average discounts obtained on behalf of state employees or retirees;
Requiring the plan's pharmacy benefits manager (PBM) to pass all manufacturer discounts on to the plan to help fund the program, instead of keeping all or part of the negotiated discounts.
Offering generic alternatives and a mail-order option to obtain greater discounts for consumers.

A Prescription Drug Review Commission, with legislative, coalition and pharmaceutical industry representation, will ensure effective oversight and public accountability over the plan. The Commission may also initiate studies to determine more effective ways of operating the plan.

The Ohio Department of Job and Family Services will administer the program, including creating and running the application process. The agreement caps administrative expenses at 5% of discounts. ODJFS will also select, through a competitive process, a PBM that will negotiate discounts and develop a formulary, including generic and brand-name drugs. 

Pharmaceutical manufacturers' participation in this program (i.e. payment of rebates) is voluntary. However, manufacturers not offering rebates will be excluded from the formulary and, may be placed on prior authorization under the state employee plans. If enrollment in the program is large enough, the pharmaceutical manufacturers may be more inclined to participate.

LIMITATIONS OF THE BILL
The coalition's agreement creates a framework for a program. The effectiveness of the actual program will depend on many factors, including how the law and rules are written and how the program is administered.

If enacted, Ohio's Best RX will provide help to many Ohioans who cannot afford prescriptions now. However, like the coalition's original proposal, the discounts may not be great enough to help very low-income people. Many states, but not Ohio, have prescription assistance programs using public funding to purchase drugs for people who cannot afford even discounted medications. (Many low-income people are eligible for the manufacturers' voluntary assistance programs, available at www.RXforOhio.com.) 

And, unlike the coalition's original proposal, this plan is means-tested for people under 60, leaving people with incomes above 250% poverty without relief.

For questions, contact Cathy Levine, UHCAN Ohio executive director, at (614) 456-0060, or clevine@uhcanohio.org.