Senator Bob Deuell
Texas Senate, District 2
P.O. Box 12068 Capitol Station, Austin, Texas 78711

DATE: April 4, 2002
CONTACT: Don T. Forse, Jr.
(512) 463-0102

Op-Ed Column by Sen. Rodney Ellis and Sen. Bob Deuell
Saving Money, Saving Lives

Texas has a drug problem. But it's not the drug problem that immediately comes to mind. The problem Texas has is with prescription drugs, and their escalating costs. Prescription drug prices are increasing, and some estimates have the costs rising twice as fast as the inflation rate.

But Texas has another problem, and that is a tight state budget. It is no secret that Texas is facing a massive budget shortfall this session. Current projections put this shortfall somewhere between ten and fifteen billion dollars.

Rising costs and less money could leave Texas at a dangerous intersection. How do we ensure our citizens have access to the drugs they need, and how do we do it with limited resources?

The State of Texas spends a majority of its dollars on two budgetary areas; education and health and human services (HHS). There is little taste in Austin, or anywhere in Texas, for cuts to education. As a result, HHS is moved into the budget cutting spotlight.

The state Medicaid program is by far one of the largest and most expensive undertakings of the Health and Human Services Commission. This program uses a mix of state and federal dollars (mostly federal matching funds) to administer what is essentially a health insurance program for Texas' most needy. This safety net is designed to prevent our County Hospitals and Emergency Rooms from becoming overcrowded and broke.

The baseline budget offered by the Health and Human Services Commission and the Department of Human Services includes a 33% across the board cut in Medicaid spending. This cut translates into a reduction of over nine billion dollars in Medicaid across Texas. Included within this figure is a two billion dollar reduction in the Medicaid prescription drug program.

Skyrocketing prescription drug costs combined with large reductions in funding will undoubtedly result in many sick people going without their needed medications. This will result in many of those people ending up in emergency rooms for ailments that could have been treated in a much more cost effective manner through a proper prescription drug regimen.

It is for this reason that a bipartisan approach is being taken in Austin to design a new to operate the Medicaid Drug Program. Senate Bill 797, the Fair Market Prescription Plan, is a new approach for Texas that will improve access to prescription medications for thousands of Texans, and at the same time save hundreds of millions of dollars.

SB 797 will create a preferred drug list for the State Medicaid program. This list will be designed by a special committee of doctors, pharmacists and consumer representatives called a Pharmacy and Therapeutics (P&T) committee. The P&T committee will decide, based on clinical efficacy, safety, and cost. Those drugs that are not immediately placed on the preferred drug list will have an opportunity to be put on the list by the manufacturer offering the state a lower price for the medication.

If a drug does not make the list right away, it will still be available to those who need it, through a prior approval list. Cancer and HIV drugs, as well as a few other exceptions will not have to go through this process.

This new approach will save the state hundreds of millions of dollars. This money will be used to help save some of the health and human services that the people of Texas rely on daily.

There are some other pieces of legislation being discussed that attempt to address the same problem through different methods. One such approach seeks to privatize this process through a Prescription Benefit Manager. We feel strongly that privatizing this program will only lessen accountability.

Our approach is the only legislation that already has true bi-partisan support, and protects consumers. We are working with the many stakeholders in this are to ensure that nobody is left out of the process. We have welcomed to the table, and heard from doctors, consumers, advocates, and drug companies. This sort of cooperation is of vital importance in major legislation of this nature because it will have an effect Texans' very sustenance.

We know that it is possible to achieve these savings by leveraging the bulk purchasing power of the State of Texas. Smaller states have already begun similar methods and are seeing savings in the millions of dollars. The Federal Government and other public health plans are already saving huge amounts of money on their prescription drugs due to special pricing that they receive from the drug companies. It is time for Texas to do the same.

Senator Rodney Ellis (D-Houston) is chairman of the Senate Government Organization Committee. Senator Bob Deuell (R- Greenville) is a practicing family physician.