The Boston Globe
October 10, 2000
The Rx for affordable prescription drugs
Teresa Heinz and Joseph P. Kennedy II
Solving the problem of how to make prescription drugs more affordable and available to all the citizens of Massachusetts is a formidable challenge. The public and private sectors have been unable to solve this problem separately. But we can do it together.
Both the Heinz Family Philanthropies and Citizens Energy Corp. have pursued complementary paths to provide senior citizens and uninsured working poor families with access to prescription drugs at affordable prices. And we agree that the initiatives should be implemented at the earliest opportunity.
Massachusetts is in a unique position to help its citizens cope with the cost. In 1999, the Legislature passed a law designed by Citizens Energy that will pull together large groups of consumers into a single pool and then use the leverage of collective buying power to negotiate deep discounts from pharmacies and pharmaceutical companies to aid the uninsured.
That initiative would deliver the same discounts to the uninsured as those enjoyed by the 80s percent of consumers with prescription coverage. The aggregation principle is based on Citizen Energy’s 20-year policy history of using volume purchasing in natural gas, electricity, home heating oil, and prescription drugs to deliver savings to consumer. While providing real savings to individuals, the bulk purchasing strategy would also save money for taxpayers by significantly reducing the state’s costs in the Medicaid program for the poor as well as state health care reimbursements for the uninsured. In addition, tens of thousands of retired state employees would pay lower health insurance premiums because of the savings the Citizens plan would achieve.
The first law of its kind in the nation, the Massachusetts bulk purchasing plan has been copied by other states because policy makers recognize the value of giving seniors and the uninsured deep discounts on prescription drugs, prices that are currently available only to the pharmaceutical companies’ biggest customers.
Earlier this year, the Legislature passed the HOPE Plan, a blueprint presented by the Heinz Family Philanthropies. The plan would enable the state to untangle a dilemma that has left legislators in other states tied in knots: creating a prescription drug plan for all senior citizens, regardless of income, that is voluntary, comprehensive, includes catastrophic coverage, but is affordable.
This challenge comes at a time of urgent need. Today, senior citizens constitute just 12 percent of the total population but consume more than 35 percent of all prescription drugs and more than 40 percent of all over-the-counter medications. A typical senior fills 19 prescriptions a year; lower-income seniors fill almost twice as many.
About one in five Medicare beneficiaries faces $1,500 a year in prescription drug costs. Approximately 5 percent will spend upwards of $5,000 a year. Those are costs that many senior citizens must pay out of their own pockets while trying to survive on fixed incomes. As a result, seniors are likely to enter expensive nursing homes prematurely, and the uninsured are likely to see family members spend lengthy stays in hospitals. This means that the high cost of that care is ultimately borne not only by individual seniors but also by their children and the taxpayers.
The choice between heating a home and purchasing needed prescription drugs is an agonizingly real one for too many senior citizens and working poor families in Massachusetts.
As partners in the common goal of making prescription drugs more available and affordable to all citizens, we believe both plans should be implemented as soon as possible. Individual consumers, particularly working families and the elderly, should not have to wait one day longer before getting the same discounts drug companies give to their biggest customers.
Each program will work better individually -- and both will work together more successfully -- if more people are able to take advantage of them. The key to the success of both plans will be the Commonwealth’s willingness to initiate an aggressive marketing strategy. With it, every citizen wins. Without it, the elderly and uninsured working families will continue to suffer.
The combined enactment of the HOPE Plan and the Citizens Energy bulk purchasing law has already created a national model for cooperation among the public, private, and philanthropic sectors. In implementing them successfully, Massachusetts can set an example for the nation once again.
Teresa Heinz is chairman of the Heinz Family Philanthropies. Joseph P. Kennedy II is chief executive of the Citizens Energy Corp.