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REP. STARK’s "TRACEABLE" Rx LEGISLATION FOR CONTROLLED DRUGS SET FOR REVIEW AT WAXMAN HEARING; STARK BILLS COULD SLIP THROUGH VIA BUDGET RECONCILIATION

Executive Summary

A package of three bills introduced by Rep. Stark (D-Calif.) to provide "traceable" prescription forms for controlled substances is scheduled to be reviewed during a panel on Medicaid budget initiatives at a Sept. 14 hearing before the House Energy & Commerce/Health Subcommittee chaired by Rep. Waxman (D-Calif.). The House Ways & Means/Health Subcommittee chairman reportedly may push the legislation (HR 5529-5531) as budget deficit reduction measures on the grounds that they could save, in his estimation, "more than $1 bil." on prescription drugs to which "millions" of elderly and poor people are "unnecessarily addicted." The inclusion of the Stark bills in the agenda for the Waxman hearing indicates that they could be seriously considered by House Democrats as a cost-cutting measure appropriate for budget reconciliation. The hearing will also focus on Sen. Pryor's (D-Ark.) Medicaid drug rebate legislation as a deficit reduction measure. Introduced Aug. 3, the Stark bills would require that prescriptions for addictive pharmaceuticals controlled under Schedules II, III, IV or V of the Controlled Substances Act be written on forms that are "traceable to the doctor and reported to the state health agency" ("The Pink Sheet" Aug. 13, p. 8). The Pharmaceutical Manufacturers Association will attempt to cut off any attempt to move the legislation through budget reconciliation procedures. The association is likely to be joined in its opposition by the American Medical Association. The limited time remaining on the congressional calendar makes it nearly impossible for Stark to shepherd the bills through the normal legislative process. The Food Marketing Institute, whose food chain members include stores that contain pharmacies, suggested that illicit use of addictive prescription drugs dispensed under Medicaid could be reduced more efficiently through electronic drug claims processing. In a Sept. 4 letter to Stark, the association maintained: "To the extent that your proposal would establish an accountability system for the Medicaid program, which is plagued by patient fraud and abuse along with excessive or illegal patterns of prescribing and dispensing, FMI believes that these problems could be effectively addressed if the Health Care Financing Administration ...would simply implement an electronic claims processing system that would include retrospective drug utilization review." FMI predicted that an electronic claims processing system "would reduce administrative costs by as much as $60 mil. for all drugs" beyond Rep. Stark's cost savings estimates since prescription drug claims represent "more than 50% of all claims processed by Medicaid." Regarding addictive pharmaceuticals dispensed outside Medicaid, FMI urged that Stark's accountability system apply only to products controlled under Schedule II. "There are a number of programs already in place that have the capability of detecting unnecessary, fraudulent or illegal prescribing and dispensing of Schedule III, IV and V controlled substances," the association said. Such systems include the Surveillance and Utilization Review Subsystem, Automation of Reports and Consolidation Orders System, Drug Abuse Warning Network, and the Prescription Abuse Data Synthesis. "It makes little sense to create a new program for" Schedules III, IV and V and "significantly increase compliance and recordkeeping costs for supermarket pharmacies when data from existing programs are not being used," FMI said. The association noted that supermarket pharmacies accounted for "more than $3.5 bil." (16%) of all retail prescription drug business in 1989.
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