Bredesen TennCare plan: Drug companies are questioning legality
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Their efforts already have begun.
After a meeting late last week, lobbyists for several drug companies told The Associated Press that one aspect of Bredesen’s plan could violate federal law.
Bredesen wants TennCare to stop covering two drug classes — allergy medications and antacids — both of which are available over-the-counter. That could save Tennessee taxpayers up to $130 million.
“I am asking people to purchase these the same way they do vitamins or cough syrup: off the shelf in their local pharmacy,” Bredesen said.
But Sandy Beaty, a lobbyist for Pfizer who chairs a state Pharmaceutical Research and Manufacturers Association task force, said the federal government requires drug companies to charge the cheapest prices to Medicaid and in return promises that each drug will be covered.
She said she believes knocking those two drug classes off the preferred drug list would violate that agreement.
Bredesen spokeswoman Lydia Lenker said the administration doesn’t think so.
“The pharmaceutical industry has not been successful in other states where they have made this challenge,” she said. “There is nothing in our analysis that leads us to believe an aggressive PDL (preferred drug list) or any part of the strategy will not move forward.”
Finance Commissioner Dave Goetz says the governor also would like for TennCare to stop paying for such common over-the-counter drugs as aspirin and Tylenol. More than 212,500 claims for coverage of aspirin prescriptions were paid by TennCare during the last six months of 2003.
Bredesen’s plan would save a total of $2.5 billion in state tax dollars over the next four years mainly by requiring enrollees to pick up some of the cost, in part by restricting drug use, including a limit of six prescriptions per month for all enrollees except children, pregnant women and the disabled.
Also, he wants to require that the “lowest-cost” drug is prescribed. TennCare’s average cost for a brand-name prescription is $63 per prescription, but only $18 for a generic drug.
Pharmaceutical lobbyists want to know what the governor means by lowest-cost drugs. And they want to know how it would affect contracts that companies have with the state to get their products on the TennCare preferred drug list. Tennessee collects hundreds of millions of dollars in rebates from the pharmaceutical companies.
The lobbyists, most of whom declined to talk publicly, also want to remind Bredesen of the thousands of jobs that pharmaceutical companies create in Tennessee — particularly with several manufacturing plants in the state operated by GlaxoSmithKline, Schering-Plough and others.
The lobbyists have asked for an audience with the governor to discuss his proposal.
“We really want to work with him. We think we can walk hand in hand with him,” Beaty said.
Bredesen, who announced his plan Tuesday and spent the rest of the week touring the state to discuss it with various interest groups, has said there are many details that still need to be worked out.
But the bottom line for the governor is that TennCare costs are skyrocketing and drugs are the biggest reason. He said pharmacy costs in TennCare are expected to exceed $2.3 billion this year. Over the past three years, pharmaceutical costs grew 23 percent annually, compared to 9 percent growth in other TennCare costs.
Lawmakers gasped when they heard Bredesen say the average TennCare enrollee gets 30 prescriptions a year, nearly three times higher than the Southern and national averages.
The TennCare number includes the state’s sickest people and the other statistics are representative of the entire population, but the average Tennessean does get 16 prescriptions per year, which is among the highest rates in the country.
So it’s no surprise the governor believes the pharmaceutical companies will try to block some of his changes. He urged lawmakers not to approve legislation “that ties our hands in dealing with this critical issue.”
Some of the most successful lobbyists in the state represent drug companies, including House Speaker Jimmy Naifeh’s wife Betty Anderson, who lists both Abbott Laboratories and GlaxoSmithKline as clients.
Nevertheless, Naifeh said he doesn’t expect to be lobbied hard by the drug companies because they know he is “wholeheartedly” behind the governor.
“I think they know the House is going to be pretty strong, both Democrats and Republicans, with this governor,” Naifeh said. He said senators likely will be under more pressure.
Sen. Jerry Cooper, chairman of the Senate Commerce Committee that oversees TennCare legislation, said he has already heard drug company lobbyists complain.
“They’re going to be in here with all kinds of people trying to defuse the governor’s plan. I’d say you can take that to the bank,” said Cooper, D-Morrison.
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