Acrossthe country, states are confronting massive budget deficits, and Missouri is noexception. As you pursue remedies to address a $500 million projected shortfallthis year and a $700 million gap for 2012, the National Taxpayers Union (NTU)and its 7,300 members in Missouri urge you to avoid proposals that could worsenthe state’s fiscal woes. Among these are House Bill 821 and Senate Bill 236. Weare concerned that both pieces of legislation could cause millions in wastefulprescription drug spending, decrease Missourians’ access to affordablemedicine, and shift these additional costs directly onto the backs ofstruggling taxpayers.
Throughoutour 40-year-plus history, NTU has recognized the importance of private-sectorinnovation and intellectual property protections for medical care services ingeneral and pharmaceuticals in particular. We contend that an environment inwhich risk-takers are allowed to recover their development costs for brand-nametreatments can foster long-run economic and fiscal benefits. At the same time,NTU has championed health care reforms that emphasize restoring theconsumer-provider relationship between doctors and patients, employingcost-management and payment-efficiency improvements for government programs,and empowering consumers with more choices about how to spend their dollars.
Allof these factors must be carefully weighed and balanced so as to nurture ahealth care system that properly serves patients, providers, and taxpayers. Webelieve that HB 821 and SB 236 fail to meet such a test. A key issuesurrounding this legislation is the use of generic medications, a most vitaltool in lowering prescription drug costs for all insured Missourians as well asMedicare Part D and the federal and state taxpayer-backed Medicaid program.
Thoseimpacts are not speculative. I call to your attention a new study (click here)from the American Enterprise Institute, which analyzed ten brand drugs expectedto go off patent in 2011 or 2012. The study predicts total annual overspendingof $289 million-$433 million ($3 million of which occurs in Missouri) due topotential underutilization of therapeutically equivalent generics to thesemedications.
Inaddition to fiscal considerations, HB 821 and SB 236 add new layers ofregulation and bureaucratic interference in how plan sponsors can evencommunicate to patients about savings opportunities. Furthermore, nearly half the states haveimplemented reforms establishing more effective management andinformation-sharing about drug-treatment options, which have maintained qualityof service for patients while yielding quantifiable budgetary savings. Toreverse this progress now, by passing HB 821 or SB 236, would be a gravedisappointment to Missouri’s taxpayers.
NTUand its members hope you will strengthen, not weaken, the financial conditionof Missouri by opposing HB 821 as well as SB 236, and by supporting additionalmeasures to reform government health care programs. Toward these ends, we standready to work with you now and in the future.