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Executive Summary

Prior approval provisions contained in Medicaid drug savings legislation represent a "careful balancing of interests of physicians and state Medicaid programs," Sen. Pryor (D-Ark.) contends in a four-page critique of issues raised at the Sept. 17 Senate Finance subcommittee hearing on the legislation. However, he added that he would continue to work with the states, the American Medical Association and other affected parties "to ensure that, to the extent possible, prior approval programs help the states control utilization of select drugs where the state wants to do this, but that they do not interfere with good medical practice or compromise the quality of patient care." In a Sept. 21 letter to Finance Committee Chairman Bentsen (D-Tex.), Pryor said concerns raised by the pharmaceutical industry about prior approval and other issues are not "anything but 'red herring' arguments being used to kill any proposal that would assure cost savings and access to needed medications." The four-page review explains that Pryor's second Medicaid drug bill, S 3029, would require prior approval programs for drugs that have not been discounted to state Medicaid programs. However, the "bill does not require or even encourage states to implement prior approval for drugs for which the states receive rebates from manufacturers," Pryor says. The bill directs that any prior approval program must have the ability around-the-clock to provide an immediate response to physicians or pharmacists. The House Medicaid savings bill sponsored by Reps. Wyden (D-Ore.) and Cooper (D-Tenn.) takes the same position on prior approval. In testimony before the Senate subcommittee, Pharmaceutical Manufacturers Association President Gerald Mossinghoff expressed reservations that the bills provide no criteria for approval nor disapproval, nor provide for an "appeal procedure if the doctor is overruled." He also suggested that prior approval could "permit a de facto restrictive formulary even though all manufacturers would be required to provide a rebate." While Pryor told Bentsen he was "frankly surprised to hear concerns raised" about prior approval, both Wyden and Cooper indicated they may be willing to rethink the issue. During the hearing, subcommittee Chairman Riegle (D-Mich.) emphasized a need to safeguard Medicaid recipients' access to the products selected by their physicians, calling the Medicaid population the "walking wounded" most in need of high quality care. Cooper replied that he would "be happy to work with the gentleman to make sure that access to first class medicine is available to the poor of this country." He continued: "Our bill in no way encourages the use of prior approval plans...Should this committee want to go ahead and preclude a state from having a prior approval plan, personally that wouldn't bother me." He added though that his homestate of Tennessee operates a prior approval program that is not a "nightmare." He said it targets about 10 drugs, and is aimed at, for example, ensuring that the anti-depressant Prozac is not used for weight loss.

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