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Open Letter: Prescription Drugs
by Joel Gilbertson


August 09, 2004

The Honorable Johnny Ellis, Alaska State Senator
The Honorable Bettye Davis, Alaska State Senator

Dear Senators Ellis and Davis:

Governor Murkowski has asked me to respond to your letter expressing concern for the cost of prescription drugs for seniors in Alaska. It is an area of concern Governor Murkowski has been actively addressing over the past 20 months. I am happy to report to you that we have made significant progress in this area.

As a result of a new federal law, Medicare is making some of the most significant improvements to the program since its inception in 1965. Medicare will provide benefits that will save Alaska's seniors money on the life-enhancing and life-saving prescription drugs they need.

The opportunity for savings begins with Medicare-approved drug discount cards that are now available. In 2006, Medicare will offer comprehensive prescription drug coverage. This voluntary benefit is expected to provide seniors with significant prescription drug savings. People eligible for Medicare who have lower incomes can save even more through both the Medicare-approved cards and the prescription drug coverage.

The drug discount card provides $600 in annual assistance to low income Medicare beneficiaries in addition to the discounts available to all beneficiaries. The Center for Medicare and Medicaid Services estimates it will send $10.5 million in benefits to almost 9,000 needy Alaskan. In 2006, under the new Medicare Part D program, more than 20,000 Alaskan Medicare beneficiaries will get complete drug coverage while paying no premium and never more than $5 for any drug, all with no deductible. Also, an estimated 2,650 beneficiaries will quality for reduced premiums, deductibles, and copayments.

But our administration cannot, and will not, stand idly by and fail to tackle head on the high costs of prescription drugs in Alaska - as had been the case in the 8 years before Governor Murkowski took office.

First, we're helping needy seniors afford their prescription drugs.

To accomplish this, our administration created SeniorCare, a new program that provides an array of services for Alaska seniors. SeniorCare bridges the gap that exists for low-income seniors until the full Medicare prescription drug coverage begins in January 2006. It also established the Alaska Senior Information Office for all Alaska seniors. The Alaska Senior Information Office provides a web site, and statewide toll-free telephone number, 1-800-478-6065, for information on services available to seniors. The information includes an up-to-date directory of local physicians who accept Medicaid and Medicare clients, available programs and services including SeniorCare, and prescription drug information and assistance for seniors.

Seniors who qualified for the Senior Assistance Program (65 and older and 135 percent of the poverty level), and who are not receiving comprehensive Medicaid prescription drug coverage will be provided a choice. They can choose the new SeniorCare prescription drug subsidy of $1,600 a year or to continue to receive the Senior Assistance Program cash assistance of $120 a month. Seniors between 135 percent and 150 percent of poverty level will qualify for a prescription drug benefit of $1,000 a year.

Working with AARP, we have established a Medicaid Preferred Drug List that will help control costs for prescription drugs provided to those receiving Medicaid. This proposal was made to the previous Administration by the State's Prescription Drug Task Force; however no action was taken to implement it. The list contains recommendations, selected by Alaska physicians and pharmacists, on drugs that are proven to be the most effective, moderately priced and safe. The Preferred Drug List also provides a valuable resource for all seniors to compare prescription drug costs, and enables seniors to work with their physicians to identify cost-effective drugs that are right for them. Seniors can get the list from the new Alaska Senior Information Office. AARP has described this innovative program as a "Consumer Reports" for prescription drugs.

Third, we're driving down the actual costs of prescription drugs by pioneering the first ever multi-state drug purchasing pool.

In April 2004, working in concert with Vermont, Michigan, Nevada, and New Hampshire, our administration established the nation's first multi-state prescription drug purchasing pool to save money on Medicaid drug costs and protect access to care. This innovative program brings the buying power of five state Medicaid programs to the table, and enables us all to negotiate larger discounts on prescription drugs from pharmaceutical manufactures. The most critical thing this multi-state purchasing pool does is to protect and preserve health coverage for Alaska seniors and children receiving Medicaid.

We have substantially improved Alaska's senior citizens access to prescription drugs that are not only affordable, but, more importantly, are safe and effective. Both Governor Murkowski and I have rightly criticized the unequal prices charged for prescription drugs between the U.S., Canada and Europe. In fact, as a United States Senator, Governor Murkowski voted to allow for the safe reimportation of prescription drugs. Quite simply, America's seniors should not be asked to underwrite the research and development costs of pharmaceuticals for the entire world.

While there is great expectation and excitement about drug reimportation, we must ensure that the necessary safety precautions governing prescription drugs in the United States are applied to reimported drugs as well. The American Medical Association notes that without the protections found in the United States, there are no guarantees that the drugs patients order are the drugs they receive. The AMA has called for any system of reimportation to include strict standards not only for what drugs would qualify but also for the manufacturing facilities, labeling and packaging, and tracking of chains of custody.

I note in your letter that you question the incongruous situation of jobs being relocated out of the United States, yet Americans being unable to import drugs from Canada. We are working as an administration to ensure that prescription drugs are affordable to Alaskans and that good paying jobs are available for Alaskans. Governor Murkowski has spearheaded our efforts to grow Alaska's economy, and the Department of Health and Social Services is working daily to accomplish this goal by supporting healthier families, safer communities and stronger workers. We are very disappointed, however, to have just discovered that the previous administration had actually entered into a contract that used taxpayer dollars to send good paying U.S.-based jobs overseas to India. At Governor Murkowski's direction, we are working to bring these jobs home and invest in our residents.

In conclusion, we will continue to work with our Congressional Delegation and Secretary of Health and Human Services, Tommy Thompson, to find way of providing access to safe and low cost prescription drugs. Our goal continues to be weighted heavily with concern for the protection of those purchasing prescription drugs. It is imperative that they are assured that any prescription drugs they receive are safe and effective. But is is also clear that the days of requiring America's seniors to pay more for prescription drugs that our neighbors in Canada are, and should be, numbered.


Joel Gilbertson
Commissioner Alaska Health and Social Services




pdfLetter to Governor Murkowski from Senators Davis and Ellis



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