California Ballot 2016 - Prop 61
This is the short-form ballot summary of Proposition 61 on the California ballot in 2016:
Prohibits state from buying any prescription drug from a drug manufacturer at price over lowest price paid for the drug by United States Department of Veterans Affairs. Exempts managed care programs funded through Medi-Cal. Fiscal Impact: Potential for state savings of an unknown amount depending on (1) how the measure’s implementation challenges are addressed and (2) the responses of drug manufacturers regarding the provision and pricing of their drugs.
On the surface this seems like a good idea. Require that the state pay no more than the VA pays for prescription medications. The VA pays lower prices for a number of reasons, and they are definitely paying less than state Medicaid programs. So why not tie what these Medicaid programs pay to the lower pricing the VA is able to obtain?
Then there is the fact that "big pharmacy" is spending tens of millions of dollars to defeat Prop 61. Again, on the surface that seems to be reason enough to vote for it. That's something that the people behind Prop 61 are counting on you buying into.
The questions that need to be explored to make an informed decision about this proposition are:
1. Why does the VA pay a lower price than a state program for prescription drugs?
2. What would happen if Prop 61 passes to the pricing structure of these drugs? Would the VA wind up paying more, as commercials are telling us?
3. Why is the AIDS Healthcare Foundation spending millions to pass this proposition, when it will have no impact on the price that organization pays for drugs through its own health plans?
So why does the VA pay less for drugs than California's Medi-Cal program? Even with the recent explosion in Medi-Cal enrollments in California since 2012, there are just under 12 million Medi-Cal recipients in CA. Some of them are covered by both Medicare and Medi-Cal and so Medi-Cal is not their primary provider for prescription medications. The VA is mandated by federal law to pay no more than 76% of the average wholesale price of a prescription medication. But that is an artificial limitation. The VA is actually paying less that those limits because of negotiated discounts. Discounts that require the VA not disclose the pricing structure. It also must be noted that the VA does not have as extensive a formulary for medications. That's something I have personal experience with. During my numerous visits to the VA, both for emergency room care and for regularly scheduled care, I've discussed the merits of medications for treatment of my various ailments. Some of the medications that I had excellent results with when I was fortunate enough to have private health insurance are simply not available through the VA pharmacy system. So even though the number of veterans who are covered by the VA's healthcare programs is just over 9 million, the VA pays less for our prescriptions because of the reduced formulary and that federal mandate.
The smaller formulary has another impact on Prop 61. Any medication not available from the VA would not be subject to the pricing controls contained in this proposition.
What would happen if Prop 61 passed? The commercials tell us that veterans will pay more for prescriptions from the VA. That doesn't seem to be accurate. At least not according to the VA website which contains the following information concerning prescription copayments:
To understand the different priority groupings, you can get that information here.
The bottom line here is that all copayment amounts at the VA are set by Congress. To increase the amount veterans pay to the VA for prescriptions would require an act of Congress. So the fear-mongering of the opponents of Prop 61 doesn't make logical sense. That doesn't make it any less effective of a message though.
Which brings us to the reasons why the AIDS Healthcare Foundation is supporting Prop 61. According to an article in the L.A. Times the organization received more than $800 million of its budget from its pharmacies. Could that be why the man who runs the AIDS Healthcare Foundation crafted Prop 61 to exempt his organization from its pricing controls?
I'm voting NO on Prop 61. Not because I'm scared that veterans will pay more for prescriptions. That almost certainly won't happen. I'm voting no because I see no good reason for this measure. Maybe if it applied to all state agencies that provide prescription meds. But it doesn't.
Prohibits state from buying any prescription drug from a drug manufacturer at price over lowest price paid for the drug by United States Department of Veterans Affairs. Exempts managed care programs funded through Medi-Cal. Fiscal Impact: Potential for state savings of an unknown amount depending on (1) how the measure’s implementation challenges are addressed and (2) the responses of drug manufacturers regarding the provision and pricing of their drugs.
On the surface this seems like a good idea. Require that the state pay no more than the VA pays for prescription medications. The VA pays lower prices for a number of reasons, and they are definitely paying less than state Medicaid programs. So why not tie what these Medicaid programs pay to the lower pricing the VA is able to obtain?
Then there is the fact that "big pharmacy" is spending tens of millions of dollars to defeat Prop 61. Again, on the surface that seems to be reason enough to vote for it. That's something that the people behind Prop 61 are counting on you buying into.
The questions that need to be explored to make an informed decision about this proposition are:
1. Why does the VA pay a lower price than a state program for prescription drugs?
2. What would happen if Prop 61 passes to the pricing structure of these drugs? Would the VA wind up paying more, as commercials are telling us?
3. Why is the AIDS Healthcare Foundation spending millions to pass this proposition, when it will have no impact on the price that organization pays for drugs through its own health plans?
So why does the VA pay less for drugs than California's Medi-Cal program? Even with the recent explosion in Medi-Cal enrollments in California since 2012, there are just under 12 million Medi-Cal recipients in CA. Some of them are covered by both Medicare and Medi-Cal and so Medi-Cal is not their primary provider for prescription medications. The VA is mandated by federal law to pay no more than 76% of the average wholesale price of a prescription medication. But that is an artificial limitation. The VA is actually paying less that those limits because of negotiated discounts. Discounts that require the VA not disclose the pricing structure. It also must be noted that the VA does not have as extensive a formulary for medications. That's something I have personal experience with. During my numerous visits to the VA, both for emergency room care and for regularly scheduled care, I've discussed the merits of medications for treatment of my various ailments. Some of the medications that I had excellent results with when I was fortunate enough to have private health insurance are simply not available through the VA pharmacy system. So even though the number of veterans who are covered by the VA's healthcare programs is just over 9 million, the VA pays less for our prescriptions because of the reduced formulary and that federal mandate.
The smaller formulary has another impact on Prop 61. Any medication not available from the VA would not be subject to the pricing controls contained in this proposition.
What would happen if Prop 61 passed? The commercials tell us that veterans will pay more for prescriptions from the VA. That doesn't seem to be accurate. At least not according to the VA website which contains the following information concerning prescription copayments:
|
Veterans in Priority Groups 2-6, for each 30-day or less supply of medication for treatment of nonservice-connected condition. - $8 copay. (Veterans in Priority Groups 2 through 6 are limited to $960 annual cap) |
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Veterans in Priority Groups 7-8, for each 30-day or less supply of medication for treatment of nonservice-connected condition. - $9 copay. (Veterans in Priority Groups 7-8 do not qualify for medication copay annual cap) |
To understand the different priority groupings, you can get that information here.
The bottom line here is that all copayment amounts at the VA are set by Congress. To increase the amount veterans pay to the VA for prescriptions would require an act of Congress. So the fear-mongering of the opponents of Prop 61 doesn't make logical sense. That doesn't make it any less effective of a message though.
Which brings us to the reasons why the AIDS Healthcare Foundation is supporting Prop 61. According to an article in the L.A. Times the organization received more than $800 million of its budget from its pharmacies. Could that be why the man who runs the AIDS Healthcare Foundation crafted Prop 61 to exempt his organization from its pricing controls?
I'm voting NO on Prop 61. Not because I'm scared that veterans will pay more for prescriptions. That almost certainly won't happen. I'm voting no because I see no good reason for this measure. Maybe if it applied to all state agencies that provide prescription meds. But it doesn't.
posted by me at 10:21 PM
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