Governor Sununu once said, “People say I’m arrogant, but I know better.” This seems to sum up the attitude of the Vermont Legislature this year. Their arrogance prevailed on many legislative initiatives from civil union to the most recent issue of prescription drugs.
S 300 was lauded as being the panacea to Vermont’s high prescription drug problem and its purpose was to help low income Vermonters immediately. Ironically, most of the corrective actions, such as helping nonprofit organizations to purchase lower cost drugs, can already be taken without legislation.
The Democratic leadership won praise for their expansion of the state prescription drug program but only a federal waiver is required, not legislation. However, the catastrophic component of the bill did need legislative approval for single seniors with incomes less than $25,000 and married seniors with incomes less than $33,000, provided they had drug expenditures exceeding 10% of their income. The House version of S300 had the above provisions but the Republicans wanted to expand catastrophic coverage for all age groups. That proposal was defeated.
Earlier in the session, two amendments I offered with Rep. Henry Holmes to expand some existing state programs with lower co-payments could have offered more relief to low income Vermonters. These amendments were also defeated on party lines.
The Democrats wanted a state board to establish a set of drug price regulations for consumers if their efforts didn’t reduce prices. My committee took testimony on price regulations and it was clear, the federal commerce clause wouldn’t allow us to regulate the prices of any manufacturer or wholesaler not located in Vermont. Where we could regulate prices was at the pharmacy level only and it was doubtful it would have any effect since Vermont’s sales volume equals two tenths of one percent of the national sales market.
Vermont’s only wholesale drug distributor is located in Milton and employs 150 people. They made it very clear to the General Assembly and the Governor that they would move immediately to New York if any form of price regulations passed. This didn’t stop the arrogant Democrats. They were willing to gamble access to prescription drugs for our citizens who need help in order to satisfy a political agenda. The Senate repeatedly added price regulations back in the bill. The Republicans and some Blue Dogs, led by Mike Flaherty, repeatedly rejected it.
Rep. Malcolm Severance, a former UVM economics professor, explained that price controls just don’t work. They create scarcity, rationing, more regulation, and bureaucracy. Also, US drug manufacturers spend a great deal on research and development and have a proven record of more new product discoveries than countries that have price regulations. Americans now enjoy increased life expectancy, decreased hospital stays and better quality of life because of pharmaceutical research.
My committee opposed any form of price regulations and the Republicans, with the Blue Dogs, overwhelmingly stripped this provision from the bill by almost a 3-1 margin.
Finally, the Governor and Democratic leadership agreed to defer price regulations until 2003 and if prices didn’t go down, controls could be initiated. The Governor stated he didn’t support price regulations, but he encouraged members to accept the language and repeal it next year. I can only speculate his position was to placate voters this election year even though the provision was judged to be unconstitutional. The House Republicans and Blue Dogs didn’t accept this approach and S300 died.
The increased drug price issue must be addressed at the federal level with more assistance directed to those who need it most. We also have to enhance the purchase of private coverage, look at tort reform and limit non-economic litigation awards, make patent laws more responsive to lower introductory prices for new drugs, reform Medicare to include prescription benefits, and create a plan which will encourage individual responsibility in health care utilization.
AARP and COVE (Council of Vermont Elders) also trouble me for taking their strong stand for S300 and price regulation. They were supporting more state control and bureaucracy to satisfy their agenda. When I asked AARP why their prescription drug policy wasn’t offered to Vermonters, they were oblivious to it’s existence, even though the federal government pays them almost $90 million to keep it going. I think they don’t have Vermont’s best interest in mind when price controls will adversely hurt Vermont’s business climate and image.
Though S300 failed for this year, actions are
being taken to lower drug prices in Vermont. The art world strives
for creativity. But in the political world, the price control creativity
in S300 was detrimental and no long-term solution to the problem.