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San Jose Mercury News (California)

LA councilman and consumer group examining plans to lower drug costs for locals

by Associated Press
March 18, 2004

LOS ANGELES (AP) -- To lower the costs of prescription drugs for local residents, a city councilman said Thursday that he will propose plans for residents, hospitals and companies to pool their buying power.

The program City Councilman Antonio Villaraigosa is developing with a consumer advocacy group would purchase drugs in bulk at discount and pass the savings to members.

"We want to look at how we can generate savings for the city and our residents," Villaraigosa said in a statement. He plans to introduce a motion next week asking city officials to study ways to negotiate cheaper pharmaceuticals for residents.

One possible model would establish a nonprofit entity to buy the drugs in large quantities from independent wholesalers, said Jerry Flanagan, health care director for The Foundation for Taxpayer and Consumer rights, which is working with the councilman.

Such an organization could save up to 30 percent on drugs if 300,000 members joined, he said. It would also benefit small businesses, private and public hospitals and public employees, he said.

Another possibility is expanding the buying pool to include Los Angeles County and other cities, said Joe Ramallo, Villaraigosa's communications director.

About 40 percent of the city's residents lack health insurance, according to figures provided by the Villaraigosa's office.