State Senator Criticizes Washington’s AWARDS Prescription Discount Program in Op-Ed
Washington Gov. Gary Locke's (D) Alliance to Reduce Prescription Drug Spending (AWARDS) program is not the right solution for the state because it "places the entire financial burden of the discounts on community retail pharmacies," state Sen. Linda Evans Parlette, a pharmacist, writes in a Seattle Post-Intelligencer opinion piece. The program is scheduled to begin Jan. 15 and will implement a discount plan for people over age 55 lacking prescription drug coverage. Individuals who pay a $15 membership fee (or families paying $25) receive discounts from participating pharmacies between 12% and 30% off the original prescription cost. While "on the surface" the program "sounds like a great idea" for consumers, Parlette writes, "Not one dime exists in the governor's proposed budget to pay for any AWARDS discount. Therefore, she says, the program places the entire "financial burden" of the discount on retail pharmacies. Because 85% of a prescription's retail price is it manufacturer's product cost and 3% of the retail price goes to the wholesaler, on average, Parlette contends, pharmacists are left with only 3.4% in after-tax net profits following a pay out for rent, salaries, insurance, taxes, and supplies. The AWARDS discount would cut into this remaining 3.4%. According to Parlette, one pharmacy estimated it would lose up to $270,000 annually under the discount. While pharmacies are in no way obligated to participate in the program, the plan offers a mail order discount of up to 49% for individuals ordering prescriptions from out-of-state distributors, effectively "driv[ing] customers elsewhere" if pharmacies choose not to participate, Parlette writes. She asks, "How can [Gov.] Locke believe for one second that community pharmacies can foot the bill for drug discounts and still remain in business?"
Locke instead should consider solutions that will not "crippl[e]" community pharmacists, Parlette contends. Locke could "initiate a prescription drug program using the Medicaid system to assist low-income seniors" by working with the Legislature, or publicize on his Web site drug company programs that offer discounts to low-income seniors and "others in need." Further, the governor could work with local pharmacists to encourage companies to "simplify" the paperwork associated with these discount programs. "At the state level," she says, "we must strive to improve this situation for our citizens as we encourage the federal government to provide meaningful price relief to seniors and sustainable access to affordable prescriptions" (Parlette, Seattle Post-Intelligencer, 1/9).