WV DRUG COSTS RISING, RISING - PEIA Says Generic Costs Up 25% In 2010

(02/01/2011)
By Bob Weaver

Generic prescription drug costs in West Virginia have gone up an average of 25% from last year, according to West Virginia Public Employees Insurance Agency.

Brand-name drugs, which are much higher than generic, have increased 10%, far beyond an increase to adjust for inflation.

PEIA, which spends about $260 million annually on prescriptions, has tried various ways to contain these costs, but will continue the pattern of raising premiums to stay alive.

PEIA says drug costs, along with medical care, dramatically rises every year.

PEIA says the industry is giving rebates, while at the same time they're raising the price of their drugs.

In 2004, West Virginia said it would lead the nation in efforts to contain soaring prescription drug costs for all consumers.

With much fanfare, the Legislature passed the landmark Pharmaceutical Availability and Affordability Act, creating the Pharmaceutical Cost Management Council.

A key component would have made drug makers disclose spending on marketing to doctors in the form of gifts, trips, speaking fees and other compensation, in addition to direct-to-consumer advertising.

Following stonewalling by the drug industry and heavy lobbying, the effort went down, and the newly created Pharmaceutical Cost Management Council went down with it.

A cost containment concession made by the drug industry was to set up a website where citizens could find the best deals.

Opposition from the pharmaceutical industry and a lack of political will destroyed the efforts.

The pharmaceutical industry "pushed back at every avenue," said Sen. Dan Foster, D-Kanawha, a leading advocate of the legislation.

"They're just very powerful. They have many lobbyists, and they're well paid and very well connected," Foster said. "And that's the way our system works, so as a consequence, it's been very slow going."

Residents of West Virginia, with its aging population and high rate of chronic conditions like diabetes and obesity, take more prescription drugs than people in any other states, according to the Kaiser Family Foundation. West Virginians filled nearly 19 prescriptions per capita in 2009, compared to a national average of 12.

Medicare prescription coverage endorsed by President George Bush and passed by Congress, did not seek any discounts from drug outfits, but pays on the current retail price of the medication.

With the government being one of the largest drug customers with Medicare, Bush did not negotiate lower prices.

The National Health Care Bill has several provisions to reduce drug costs, kicking in over a period of years.