California institutes drug program

January 1, 2002

Pharmaceutical Representative

California Governor Gray Davis has signed a bill creating a discount prescription drug program that would be voluntary for Medicare beneficiaries, pharmacies and drug manufacturers.

California Governor Gray Davis has signed a bill creating a discount prescription drug program - called the Golden Bear State Pharmaceutical Assistance Program for Medicare - that would be voluntary for Medicare beneficiaries, pharmacies and drug manufacturers. The program would be created and administered by California's Department of Health Services and funded with rebates paid by drug manufacturers.

"We have an important opportunity here to make a significant difference to California seniors who currently cannot afford to fill their drug prescriptions," said Davis. "The Golden Bear program will build on the current state Medicare discount program, resulting in even greater discounts on prescription drugs for Medicare recipients."

So far the Washington-based pharmaceutical industry trade group Pharmaceutical Research and Manufacturers of America has been positive about the program and its voluntary aspects. "We're happy that California has instituted a voluntary program," said Jeff Trewhitt, spokesman for PhRMA. "That's in keeping with marketplace principles, and we're pleased about that."

Success requires participation

The bill requires the DHS to begin an attempt to negotiate rebates with drug companies for drugs purchased by Medicare beneficiaries. If not enough companies are willing to participate in the program, its implementation will cease.

Whether or not drug companies will participate, however, remains to be seen. Because drug companies are not supposed to divulge pricing strategy information to PhRMA, Trewhitt couldn't say what the manufacturers were likely to do. "I can't definitively say," said Trewhitt. "But I certainly can say with absolute confidence that competitive, voluntary, negotiated discounts are something our companies are very used to, especially in this day and age of managed care, in which large competitive managed care health plans are getting increasingly generous pricing discounts all the time. But as to whether they will negotiate discounts with this program, I'm just not sure." PR

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