Getting gouged on prescription drugs

Leanne Powner, a Graduate Employees Organization/AFT member at the University of Michigan, makes about $933 a month in take-home pay-- not lots to live on, but she manages. Now, under a "surprise" new prescription plan the university imposed in January, Powner (an asthmatic whose allergies are so severe that a neighbor's cutting the grass can derail her for the day) is paying monthly prescription costs of $84.

"It's Orwellian," says former GEO chief negotiator Alyssa Picard in reference to the complicated rules of the new prescription plan, called Advance PCS, imposed without notice despite contract language that requires that the university give the unions 60 days' notice of any proposed changes in benefits. Employees went from a $7/$14 generic/brand name co-pay to a three-tier system in which drugs are classified as "generic" (a $7 co-pay), "preferred" (a $14 co-pay) and "non-preferred" (a $24 co-pay). Even more discouraging is what's not covered: The new plan excludes all injectable drugs (except insulin) and does not cover ostomy supplies or vitamins (except prenatal vitamins). It also sets quantity limits on many common maintenance drugs, such as proton pump inhibitors for acid reflux.

The prescription increases are hitting Picard's people hard. "One of our members is on several different drugs, which are all considered 'non-preferred' under the new plan," Picard says. "Her prescriptions now cost about $250 a month. It's basically eating up 25 percent of her paycheck. This is happening on the backs of some of the lowest-paid people at the university."

Picard also is concerned about the patient safety and community ramifications of the new plan. "Management wants to promote the big advantage of the plan, which is that, if you're on a maintenance drug, you can get three months of mail-order for two months in co-pay. But you have to mail-order through Advance PCS, and there's absolutely no indication of whom you should call if you have a question about the drug or your condition, as opposed to when you have a face-to-face pharmacist. [Mail-order] is also wreaking havoc on the local family pharmacies, leading at least one downtown to close within the last year or so."

The union has filed an unfair labor practice (ULP) against the university with the Michigan Employment Relations Committee, for violating the contract's notification clause. The university is now over the time limit for responding to that ULP, and the union plans to take the matter to arbitration. It will also file a second ULP against the university for refusing to negotiate a mandatory subject of bargaining.

Sadly, the GEO's experience is not unique in the current healthcare climate. In a 2002 survey by the Kaiser Family Foundation, and the Health Research and Educational Trust, 51 percent of 3,062 public and private employers studied said they were very or somewhat likely to increase the amount employees pay for prescription drugs. In fact, prescription drug spending is the fastest-growing segment of healthcare expenditures, up by 15.7 percent in 2001, according to the Centers for Medicare and Medicaid. What's growing even faster is the percentage by which drug companies have ramped up spending on advertising and promotion; in 2000, industry advertising to consumers rose by 35 percent over the previous year, up to $2.5 billion, according to a study by the National Institute for Health Care Management.

So high have prescription costs climbed that nine states (Connecticut, Hawaii, Maine, Massachusetts, New Hampshire, New York, Pennsylvania, Rhode Island, Vermont) and the District of Columbia are forming a nonprofit organization to negotiate lower prices for Medicaid patients and state employees, the Associated Press reported in January. (Maine had pioneered a state program, Healthy Maine, to control prescription drug costs and make prescription medications more affordable for the uninsured. But the program was challenged in court, and the case is now pending in the Supreme Court.)

Meanwhile, patients cope as best they can at the pharmacy counter. Leanne Powner has learned to adjust to her asthma. "It becomes part of your life," she says, "and you reshape your life to take it into account." But she's still aghast at her prescription bills--what they amount to now, and how they could continue to rise. "I know they'll keep going up," she says. "You have to wonder if anyone at any of these drug companies ever actually gets sick."