This is an historic time for health care reform. While Vermont is doing better than most other states, we continue to face unprecedented increases in costs. If we make no changes, the cost of health care in Vermont is estimated to increase by $1 billion dollars, from $4.9 billion to $5.9 billion by 2012. Per capita, that would mean an increase from $7400 to $9400 per person in the state. This is simply not sustainable.
Over the past two years, the Vermont Legislature and numerous stakeholders have taken a long look at how we might improve the general health of Vermonters and reduce costs. Last week, the House passed S.88, a result of that work.
This 40-section bill begins by articulating goals for statewide reform and outlines principles that should underlie a statewide, integrated health care system. It strengthens primary and preventive care, builds community health teams, addresses chronic conditions and obesity management and takes a focused look at 3 different health care models for the future. In addition, it aligns with the new federal reform so that we can apply for grants and waivers, drawing in as much federal money as possible in support of our efforts to keep Vermonters healthy.
One section of the bill addresses expenses related to pharmaceutical marketing. Currently pharmaceuticals spend $29 billion annually on national marketing. Most people do not realize that when they fill a prescription, 30% of that cost goes to marketing and nearly 62% of that goes toward the distribution of free samples. Both the new federal legislation and S.88 look at this as an area where costs could be significantly reduced.
Free samples clearly fill a need and can be wonderful for doctors and patients, however they are not made available simply because the pharmaceuticals just developed a big heart. They are a huge marketing tool. A 2009 report from the Institute of Medicine concluded that samples affect prescribing patterns and lead to patients being put on medications which might have less costly, more medically appropriate generic alternatives.
In reference to the free samples section of the bill, we received numerous letters from patients and doctors around the state concerned that they would lose access to valuable free samples or would be required to jeopardize privacy and confidentiality in the doctor/patient relationship. This is incorrect.
First, this bill does not restrict the distribution or acceptance of free samples. Doctors and clinics will still be able to receive free samples and dispense them as they deem appropriate. Second, this bill does not require doctors to report anything. If you receive a sample, this information remains with you and your doctor. No patient names required.
What this section of the bill does do, is piggy-back on the new federal legislation which will require pharmaceuticals, not doctors, to report which free samples are going where as of January, 2011. If the federal reports are presented in a form that is not found to be useful to the state, S.88 would require the pharmaceuticals to report Vermont-based information directly to the Vermont Attorney General’s office. That is the sum total of the impact of this section of the bill.
So what will happen with this information? This data will be used to analyze what classes of medications are being given away as free samples. From this, it may be possible to set up a program to replace free samples with generic alternatives through a voucher program. This could save millions of dollars, taking one step toward reducing overall health care costs.
S.88 passed the House last week and is now in the Senate. If the Senate concurs, the bill will move on to the Governor for signature. If they do not concur, a “committee of conference” made up of 3 members of the House and 3 members of the Senate will meet to iron out differences before brining it back to both bodies again for a vote.