Govís Prescription Drug Plan Scrutinized by LAO

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, Feb. 11, 2005 Share this on FacebookTweet thisEmail this to a friend

On February 9th, the Legislative Analyst’s Office (LAO) released a comprehensive analysis of Governor Schwarzenegger’s prescription drug discount plan for the uninsured.

The report concluded that the Governor’s plan "provided a reasonable starting point" for the development of a drug discount program. However, the LAO suggests that in the event that drug manufacturers fail to deliver significant price concessions, "an automatic trigger would phase-out the proposed voluntary approach to obtaining rebates from drug manufacturers and be replaced by an alternative strategy likely to result in greater discounts on more drugs for consumers."

The LAO recommends the Legislature endorse one of two proposals that they deem "strategic approaches" in creating cheaper drugs:

* Proceed with the Governor’s proposal of attempting to gain rebates on a voluntary basis from drug manufacturers. This approach would generate some significant discounts on some prescription drugs, although the exact level of savings is relatively unknown.
* Implement a pharmacy assistance program that does not rely upon voluntary rebates but instead requires rebates from companies as a condition to allowing their drug products to keep their preferred status in the Medi-Cal Program (not subject to prior authorization requirements).

To download the full report:
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