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Weblog

Rx Bulk Purchasing Gets New Support

by Jerry Flanagan, (310) 392-0522 ext. 319

50 of the nation's largest employers announced plans to join forces to bulk purchase prescription drugs. The employer group hopes to use its combined purchasing clout to negotiate directly with pharmaceutical companies to achieve discounts for employee health care benefits.

The Canadian government and the U.S. Department of Veterans Affairs use similar strategies to purchase prescription drugs from U.S. pharmaceutical companies for discounts of 30-60%.

In comparison, Congress has consistently opposed prescription drug reform, even strategies as market-friendly as bulk purchasing. Case in point: the recent Medicare prescription drug law guarantees a financial windfall for pharmaceutical companies by barring Medicare from negotiating bulk discounts on behalf of seniors.

Two California proposals provide a model for a national bulk-purchasing program:

** Legislation to allow uninsured patients and small business owners to join a purchasing pool run by the California Public Employees Retirement System (CalPERS) - the nation‚s second largest public purchaser of health care - moved a step closer to Governor Schwarzenegger‚s desk by receiving approval from the senate health committee (AB 1958, Frommer - LA).

** A proposal by Los Angeles City Councilman Antonio Villaraigosa would make Los Angeles the first city in the country to pool the purchasing power of residents and negotiate discounts on prescription drugs. Under Los Angeles city proposal, any individual, business or hospital could join.