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PMA CRITICIZES "PRYOR II," WYDEN/COOPER BILLS FOR ALLOWING STATES "PRIOR APPROVAL" DESPITE COMPANY DISCOUNTS TO MEDICAID; GENERIC DRUG DISCOUNTS CHALLENGED

Executive Summary

The Pharmaceutical Manufacturers Association is criticizing new legislation introduced by Sen. Pryor (D-Ark.) and Reps. Wyden (D-Ore.) and Cooper (D-Tenn.) for allowing drug companies providing Medicaid discounts to remain subject to "prior approval" procedures before their drugs are covered by states. In testimony prepared for the Sept. 14 hearing before the House Energy & Commerce/Health Subcommittee, PMA President Gerald Mossinghoff maintained that under S 3029 and HR 5589 "states could still subject any drug to a prior-approval system...even if the manufacturer provided a rebate." "In an attempt to simplify the current unsatisfactory prior-approval systems," Mossinghoff pointed out, "the bills would provide for an immediate telephonic response to a request by a doctor for prior approval." He added that "the bills do not, however, provide any criteria for prior approval or disapproval, or provide an appeal procedure if the doctor is overruled." If the association's reading of the bills is correct, Mossinghoff continued, "all of this is in sharp contrast to what is happening in the states now in negotiations for discounts and rebates in the Medicaid program: states are providing automatic access to new innovative drugs in return for discounts or rebates." Following Mossinghoff's testimony, Rep. Wyden sharply challenged PMA's position on the legislation, accusing the association of using the prior approval issue as a means to "raise a big new scare" about the bills restricting patient access to drugs. "I just don't understand how you can come in and in good faith make this a big scare about how we're reducing access," Wyden contended. "Even in the prior approval area, where you focus today, we don't do anything to increase prior approval; the only thing we do is to make it more restrictive by saying that if a state already has a program we're going to require that it be available to physicians 24 hours a day, seven days a week." * PMA additionally challenged the way the bills handle reimbursement for generic drugs versus brandname products. "The thrust of both bills in the multisource area is discriminatory," Mossinghoff said. Under the bills, single and innovator multisource drugs must be offered to Medicaid at a manufacturers' "best price." For generic drugs, manufacturers are required to rebate a flat 10% of the total aggregate expenditures for all the manufacturer's drug products. Mossinghoff further argued that Pryor's S 3029 "seems to be punitive in nature" in that "it requires that if a generic copy of a drug may be dispensed under state law, no payment for the innovator's drug may be made even if it is less expensive to the program than the generic."
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