State Watch

Maine Challenges PBMs

On September 3 the Pharmaceutical Care Management Association (PCMA), a trade group that represents the nation’s four largest pharmacy benefit managers (PBMs), filed a suit against the state of Maine to halt implementation of An Act to Protect Against Unfair Prescription Drug Practices (LD 554).

This law requires that benefits of drug-pricing deals negotiated by PBMs be passed through to health plans, discourages unwarranted drug-switching that maximizes rebate payments to PBMs, and prevents conflicts of interest.

According to information on the Maine Senate Web site, six other states are considering legislation that would regulate PBMs.

Information about the law is posted on the Web at www.mainesenate.org/health/index.html.

The PCMA said in a press release that it was “challenging a law that would empower drug manufacturers and trial lawyers at the expense of affordable prescription drugs for Maine consumers.” LD 554, according to PCMA, would require PBMs to divulge proprietary information “they rely upon on behalf of purchasers to hold down consumers’ drug costs.”

In March, the Prescription Access Litigation Project and a labor union filed suit against the nation’s four largest PBMs for inflating drug prices (Psychiatric News, April 18).

Michigan Governor Responds To State MH Crisis

Michigan Gov. Jennifer Granholm (D) announced appointment of a commission to address concerns about the state’s mental health system. The announcement follows a series of articles during July in the Detroit News, “Michigan’s Mentally Ill: Crisis in Care,” that depicts long waiting lines for services, few opportunities for employment and independent living, and little hope for parents with children who have mental illness.

Fraudulent Insurance Plans Proliferate

With support from the Commonwealth Fund, Georgetown University’s Health Policy Institute released the report “Health Insurance Scams: How Government Is Responding and What Further Steps Are Needed,” which found “a recent unprecedented increase in unauthorized and illegal health insurance plans.” The fraudulent activity has left approximately 100,000 people with millions of dollars in medical debts and no coverage.

The Atlanta Journal Constitution reported on August 28 that 10,000 people in Georgia had been left uninsured and with collective unpaid bills of more than $10 million.

The report can be accessed at www.cmwf.org/publist by clicking on “Health Insurance, the Uninsured.”

FDA Organizes Sting Targeting Drug Reimportation

In July city officials in Springfield, Mass., began a program through which the city’s 20,000 employees, retirees, and dependents who receive health insurance through the city can fax prescription drug orders to a group of Ontario pharmacies (CanaRx) and receive cheaper medications by mail, according to the Boston Globe (August 29). Officials expected to save $4 million annually in city funds.

In a letter dated August 26, the Food and Drug Administration (FDA) warned Springfield that “almost every time a city, county, or state program imported a drug from Canada, that program would violate federal law.” The FDA then ordered drugs from CanaRx using an assumed name and address. According to an FDA spokesperson, CanaRx shipped insulin in an unsafe manner.

The House of Representatives has passed legislation that would legalize reimportation of prescription drugs from Canada and several European countries (Psychiatric News, August 15).

Cuts in Substance Abuse Programs Reflected in Crime Rates

According to the August 18 OrlandoSentinel, Florida lawmakers began “slashing funds for prisoner substance abuse treatment” in late 2001, even though the largest single group of offenders in the state’s prison system consists of individuals convicted of drug-related crimes. Now, two years after those cuts, the number of inmates imprisoned on drug-related charges is higher. The legislature recently approved $66 million in emergency funding to add 4,000 prison beds.

Portland, Ore., reported an increase in crime after substance abuse treatment programs were cut (Psychiatric News, August 1).

Medicaid Cuts Hurt Mentally Ill Disproportionately

An article titled “Accomplishments and Challenges in Medicaid Mental Health” in the September-October Health Affairs asserts that responses of states to budget crises “will disproportionately affect people with mental illness.”

Services important to people with mental illness, such as prescription drug coverage, case management, and home and community-based care, are among the Medicaid benefits offered at the option of the states and therefore among the most likely to be scaled back when budgets are cut.

People with mental illness are “among the costliest populations to serve.” A study of Oklahoma’s Medicaid population, cited in the Health Affairs article, found that beneficiaries with a single diagnosis of psychosis or depression had the highest average yearly costs of all physical and mental conditions.

The high cost of care for this population is due, in part, to their use of psychotropic drugs. From 1992 to 1998, Medicaid payments for antipsychotic drugs grew by nearly 300 percent, and spending on antidepressants grew more than 240 percent.

The authors cautioned that the Bush administration’s proposal to give the states “almost complete flexibility with regard to coverage of beneficiaries and benefits offered at state option, in return for a cap on federal funding” (Psychiatric News, March 7) would place mental health coverage in competition with other health coverage in a system of capped federal funding. ▪