Citizens' Voice: Adopt plan for employee drug coverage
High drug prices usually are attributed to pharmaceutical companies alone. But those drug developers and manufacturers are only the front end of the distribution chain. Before drugs reach the consumer at their retail price they, like most goods, go through a long distribution process that adds cost at each step.
State Sen. John Eichelberger, a Blair County Republican, wants to borrow a plan from New Jersey to reduce the costs of public employee drug coverage. The system uses technology to force competition among pharmacy benefit managers based on real-world pricing.
Under current bidding for benefit managers, the state analyzes the overall price without knowing the actual costs of prescriptions.
That was the same method used by New Jersey until January. Under a law passed last year, the state conducted a transparent “reverse auction” bidding process for a master contract. Due to new technology, the state had data on actual prescription prices and a program that enabled it to compare the bids to the true market. The state projects that its prescription costs for the next three years will be 18 percent lower than under the previous system, a savings of $1.6 billion over that period.
Health coverage is a principal driver of public sector labor unrest. But in New Jersey, the unions backed the new system, which delivers the savings without diminishing workers' benefits. The bonus is that the reduced costs mean that their health insurance premium contributions did not increase this year and are projected to increase more slowly than in the past.
The Legislature should adopt Eichelberger's proposal and ensure that it applies not only to state government employees but to public school and local government employees.
— The Citizens' Voice, Wilkes-Barre