SEN. PRYOR’s MEDICAID DRUG PRICE PROPOSAL WILL SAVE $100 MIL. TO $200 MIL.

SEN. PRYOR's MEDICAID DRUG PRICE PROPOSAL WILL SAVE $100 MIL. TO $200 MIL. per year in prescription drug expenditures under Medicaid, according to estimates by the staff of the senator's Special Committee on Aging. In support of the estimate, an April 13 summary of Pryor's (D-Ark.) legislation notes that Medicaid agencies in just two states have projected annual Medicaid drug savings totaling $70 mil. from negotiated manufacturer price discounts. "California has independently estimated that drug price negotiations will save its Medicaid [Medi-Cal] program $40 mil. per year," [see related story, p. 7] and "New York believes a 10% across-the-board negotiated price reduction could save as much as $30 mil. per year," the summary states. The document also notes that Pryor is modifying the therapeutic interchange provision in his Medicaid drug price rebate proposal by requiring pharmacists to get prescriber "verification" or approval before dispensing a preferred alternative product in place of a prescribed drug. The updated proposal requires a pharmacist to telephone the prescriber "should a physician prescribe a non-preferred drug when a preferred drug is rated as a safe and effective alternative, without writing on the prescription that the non-preferred drug is medically necessary." The pharmacist then would "request a telephone order authorizing the preferred drug," and the prescriber would "either issue a telephone order for the preferred drug or issue a restrictive prescription that states the non-preferred is medically necessary." Pryor has not yet introduced a formal bill. His original proposal, floated on March 20, contained a physician override mechanism so that prescribers could block substitution of a "best price" alternative for a non-preferred drug written on a prescription form ("The Pink Sheet" March 26, p. 3). * By adding another safeguard against such interchange without prescriber approval, the senator apparently is responding to complaints by lobbyists for drug manufacturers and physicians, who have criticized the bill as establishing unauthorized therapeutic substitution. Pharmacy representatives reportedly are not concerned with the added burden the verification provision would place on pharmacists. The summary states that the verification process would ensure "that a patient's physician has absolute control over the drug dispensed" -- control that can be particularly "important" for certain patients' "special needs." The draft also asserts that the resulting pharmacist-prescriber "conversations, when they occur, provide a valuable opportunity for the interaction between the physician and pharmacist that may result in improved care, as well as reduced direct outlays for non-preferred drugs."