Public Life Foundation Report

Paying for Prescriptions:

The High Cost of Drugs and What We Can Do About It

Table of Contents

Executive Summary

Introduction

The Problem:Rising drug costs
Causes of increased costs
Challenges for the uninsured and underinsured
Challenges for the insured

Existing Efforts:Local, state and national
Federal and industry initiatives
Kentucky’s overall approach
Assistance in the Owensboro area

Possible Solutions:A local approach
Community-based health programs
Local pharmacy programs for the poor
Centralized processing center
Consumer education

Key Health Care Initiatives

References

Resources

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Executive Summary

Daviess Countians, particularly the uninsured, the elderly and the chronically ill, need help paying for prescription drugs.
Many local organizations and individuals are working to help provide prescription drugs, either free or at discounted prices, for those who need them. But there is little coordination of these efforts.
Nevertheless, Daviess County is in a strong position to help its citizens cope with the rising costs of prescription drugs.

These statements represent the findings of a study commissioned by the Public Life Foundation of Owensboro to explore the issue of prescription drug costs and ways to address the growing problem on the community level.

The study documents the many ways in which Daviess County citizens, and charitable and private organizations assist in this critical area. But the absence of coordination of these efforts leaves gaps in the local safety net for the poor and results in more work for those trying to help.

A positive reality, however, is that the presence of both volunteer and professional service providers gives Daviess County a solid foundation upon which to build an effective local strategy. The county government is already taking steps in this direction by exploring the possibility of a community-based health care model, and through cooperative efforts such as the recent commitment of Owensboro Mercy Health System to pay for a physician to serve the community’s two free clinics. As local leaders explore even more ways to help citizens cope with the high costs of prescription drugs, there are models in place elsewhere that could be replicated here. They range from programs that offer comprehensive services at no or reduced cost to those that streamline the process of using drug-manufacturer programs to obtain free medicines for the poor.

And the results of community-based initiatives often mean reduced costs for patients as well as the overall health-care system.

The Problem

The challenges facing Daviess County reflect those of the state and nation:

Health care is changing with a shift from hospital inpatient care to outpatient care. This makes drug treatment more important to ensuring patient recovery.
Drugs are getting better and more specialized, as well as more expensive. Some of the expense is warranted by scientific advances; some of it relates to the economics of the drug industry.
Doctors and patients are demanding the newer, more expensive drugs, but they are often unaware of the costs.

The problems facing uninsured or underinsured patients are particularly challenging.

They pay more for drugs than other purchasers do.
Medicare recipients often do not have prescription-drug coverage or access to affordable policies.
The uninsured may forego the drugs they need, or take only partial doses. This can ultimately increase health costs.
The insured population also struggles with prescription drug costs.
Nationally, employers are shifting more of the cost of prescription drugs to their employees.
Health insurance is more expensive in Daviess County – and insurance options more limited — than in other parts of Kentucky.
There is also a local shortage of doctors.

Existing Effort

Many state governments and the federal government have explored ways to provide free or low-cost medications to the uninsured and to Medicare recipients who do not have supplemental drug coverage. But the slowing economy makes it unlikely that a federal program will be enacted in the near future, and Kentucky has taken a fragmented approach to addressing the issue.

Initiatives in other states include:

Drug benefits for senior citizens who are ineligible for Medicaid and lack private insurance coverage.
Multi-state purchasing pools to provide discounted drugs to Medicaid recipients and residents not covered by public health programs.
State-supported discount programs to reduce costs for older patients.

In Kentucky:

State government has taken steps to control drug costs in the Medicaid program and state employee insurance plans.
The Health Kentucky program offers free drugs to the Kentuckians whose incomes are 100 percent or less of the poverty level and who do not qualify for Medicaid or Medicare.
Free drug assistance is available in various regions or communities, but there is little coordination.

In Owensboro:

Many doctor’s offices and agencies which serve the needy tap into drugmaker programs for the indigent.
Some also distribute free samples from drugmaker representatives.
A few agencies even pay directly for prescription drugs, although with limited funds.

Possible Solutions

The magnitude of the problem can make it difficult to envision a local solution, and much of it needs to be resolved at the national level. Still, experts believe – and experience in other communities shows – that much can be accomplished through community-based initiatives:

Some communities around the country have, over the last several years, initiated local health plans that include providing prescription drugs to the needy, an option Owensboro/Daviess County is considering. Often those communities can point to lower hospital and emergency room costs as a result.
Other localities have created or contracted with pharmacies to distribute free or low-cost prescription drugs. These programs often operate with the help of federal discount pricing programs.
Yet another option, suggested by people who work with the uninsured in Owensboro, is a coordinating center for the many low-cost drug programs available in the community, a service that could be tied to, or independent of, a community-wide health program.
One of the most valuable services communities can provide to the public and the provider community is information – from price comparisons to advice about how patients might communicate better with their doctors about drug options.

Introduction

Prescription drug costs are accelerating at an alarming pace in Owensboro and across Kentucky and the nation. Locally, paying for prescriptions emerged as a top concern of the hundreds of citizens who participated in forums held by the Public Life Foundation during 2001.

The foundation commissioned this report to help Daviess Countians make informed decisions about how best to cope with these costs and concerns. The report is based on a review of recent studies and other literature at the state and national levels; interviews with health care professionals, government officials and social services providers in Owensboro and elsewhere in Kentucky; and surveys of drug costs and prescription-assistance programs in the Owensboro area.

The Problem
Prescription drug costs are rising for consumers, employers and insurers here and across the nation.

At pharmacies in Owensboro and around the country, patients are paying more than $100 for a 30-day supply of the anti-ulcer drug Prilosec – three and a half times more than they would be charged for similar drugs that are available as generics.

Despite the higher cost, many doctors and patients prefer Prilosec. It may be more effective for some gastrointestinal problems and has racked up the sales to prove it. Newer, brand-name drugs such as Prilosec fueled a 19 percent increase in spending on prescriptions between 1999 and 2000.

But high and rising drug prices, however dramatic, are not the most significant factor accounting for escalating prescription costs. That designation, by all accounts, belongs to the volume of prescriptions being written. In 1992, the average American filled seven prescriptions. In 2000, the average was almost 11.

And Kentuckians take even more prescription drugs – an average of 14.3 per person, the second highest number per capita in the country, according to the Kaiser Family Foundation State Health Facts Online report. There are several theories about why this is so – the fact that there are more children in poverty, and on Medicaid, in Kentucky; the prevalence of poor health in parts of the state; liberal prescribing in some regions where managed care companies aren’t trying to rein in costs.

But in general, rising demand for new drugs is driving the increase in prescriptions. Evidence of this is found in Kentucky’s Medicaid program, which pays for health care for low-income families with children and some needy adults. Kentucky Medicaid, according to media accounts, spent more for the three most popular antacids, including Prilosec, than it did on dental care in fiscal 2001. Nationally, Medicaid spending on prescription drugs more than tripled between 1990 and 1999.

Such strong demand allows drugmakers to sustain relatively high prices. Last year the top-selling (and mostly newer) 50 drugs cost an average of $76 a month, double the cost of the rest, research shows.

What is causing drug costs to rise?

Health care is changing. To reduce overall costs, the nation’s health-care system has been shifting from inpatient care to outpatient care since the 1970s. This has meant fewer hospital stays and more home-based care and convalescence. As a result, virtually all employer health-insurance plans now cover prescriptions for outpatients – but only for people younger than retirement age.
Our population is aging. The U.S. population is getting proportionally older, and drug use nearly triples between the ages of 45 and 75. But Medicare, the government-funded health plan for older Americans, does not cover most prescriptions for outpatients. Kentucky retirees are particularly dependent on Medicare, according to a 2000 survey from the University of Kentucky and the Kentucky Long-Term Policy Research Center. More than half say they can’t afford all their medical expenses. And while low-income seniors have the hardest time, a third of those with incomes of $50,000 or more also say they can’t pay all their medical expenses.

Drugs are becoming more effective, as well as more expensive. Many new, improved brand-name drugs are coming on the market, protected against competition from generic substitutes for at least 17 years while they remain under patent.

- Some of these new drugs represent scientific advances in medical treatment.
- Others are beneficial because they are easier to take, with fewer side effects.
- Still others are “me too” drugs designed to compete with another manufacturer’s drug.

Many of these drugs are costly to begin with, and for the last several years, prices have risen an average of almost seven percent a year. That exceeds both medical (4.6 percent) and general (2.6 percent) inflation.

Doctors and patients are demanding newer, more expensive drugs. Since 1995, when the federal Food and Drug Administration loosened restrictions on prescription drug advertising, drug manufacturers have been reaching consumers directly via television. Spending on direct-to-consumer advertising has nearly doubled since 1997, and doctors also report that patients frequently ask for drugs, such as the allergy medicine Claritin, by name. But another marketing element is at work as well. Drugmakers spend about two-thirds of their marketing budgets to promote drugs directly to physicians, whom studies show are more likely to prescribe them as a result of the direct contact.

Doctors and patients are often in the dark about costs. Although 88 percent of doctors say they believe cost is an important consideration when prescribing medications, 80 percent often feel unaware of actual costs, and only a third have easy access to cost data, according to a 2000 FDA Survey.

Owensboro-area doctors may not know the varying prices of similar drugs and don’t have the staff to research costs, especially as insurance reimbursement revenues decline, said Brenda Clayton, executive director of Ohio Valley Physicians Association. Insured patients are also in the dark about drug costs because most health plans in recent years have required only small co-payments.

THE DRUG INDUSTRY: PRO AND CON

Are drugmakers justified in selling drugs at high prices because of the risks they take developing the drugs and the benefits for consumers? Or are they taking advantage of government and consumers to make a profit? There are strong advocates on both sides. Here are some of their arguments, pro and con:

New drug prices are high because manufacturers spend a lot on research to develop the drugs.

The drug industry does invest millions in research and development, and that investment has more than tripled since 1990.

However, the industry also benefits heavily from taxpayer-funded research. According to The New York Times, a 1995 Massachusetts Institute of Technology study found that, of the 14 new drugs the industry identified as the most medically significant in the preceding 25 years, 11 had roots in studies paid for by the U.S. government.

Likewise, a 1997 study commissioned by the National Science Foundation found that only 17 percent of the most significant scientific research papers cited in medicine patents came from the drug industry.

Still, those R&D costs eat up profits.

But Fortune 500 rankings released in April 2001 showed that the drug industry is the most profitable in the country, a status it has held for many years:

In 2000, the industry’s after-taxes profit margin was 18.6 percent of sales, compared to a median 4.5 percent for all Fortune 500 firms, according to the Kaiser Family Foundation’s “Prescription Drug Trends – A Chartbook Update.”
Drug manufacturers’ profits exceed their spending on research and development, which is about 14 percent of sales. While part of that money goes toward developing new drugs, the majority of it goes toward moving already-discovered drugs into production.
Drug companies spend more than twice as much on marketing and administrative costs (34 percent) as they do on R&D, according to the Kaiser Family Foundation.

The drug industry also has to cope with generics taking away their market share.

Generics do diminish market share – probably half or more of a brand-name drug’s sales. Generics also have increased their own market share since 1991, and are now holding steady at about 42 percent. More insurance plans are offering financial incentives for doctors and consumers to use them in place of brand-name drugs when available. But generics aren’t able to compete with a brand-name drug until its 17 years of patent protection has expired.

Meanwhile, drug companies are moving new products to market much faster:
The average FDA approval time for a new drug dropped from nearly three years in 1986 to one year by 1998, according to a Kaiser Family Foundation report.

Some drug companies also have tried to delay the emergence of generic alternatives onto the market. Recently Congress considered legislation to force the companies to disclose agreements with generic manufacturers to delay cheaper treatments, according to CongressDaily. Drug companies also effectively delay generics by challenging them in court; in some cases, they also have ownership interests in their generic competitors.

The people who suffer the most from the high and/or shifting costs are the uninsured or underinsured, including those with chronic conditions and the elderly.

Some 18 percent of Daviess Countians cannot afford to pay for their prescription medications, according to the University of Kentucky Health Needs Assessment conducted last year. And this number may be rising.

“We’ve seen an explosion of people needing prescription assistance” in the last couple of years, said Dana Froelich, who coordinates an assistance program for the Green River Area Development District.
Linda Dant, who runs the McAuley Clinic, says that “at least 75 percent” of the 350 to 400 people served by the clinic each month need help paying for their drugs.

Although several local agencies and providers try to help the uninsured get free prescriptions from drug manufacturers, the manufacturer programs limit supplies and do not offer a permanent solution for those with chronic conditions.

At the same time, there are many underinsured people in Daviess County, including those on Medicare. Nationally, more than a third of the Medicare population doesn’t have supplemental drug coverage, according to the AARP.

Perception: Most poor people and old people get some kind of prescription-drug assistance from the government or charity.

Reality: No they don’t. Medicaid covers only poor families with children and other adults with certain disabilities. Many low-income adults are not covered. Also, Medicare generally does not cover the cost of medication for the elderly except for drugs administered in the hospital. And, unlike most other states, Kentucky does not offer a discount drug program for the elderly.

Charities try to help – and do – but their funding sources are limited and they can’t always serve everyone. At the Free Clinic in Owensboro, for instance, low-income working people can get prescriptions, but “there are so many more people who need help with their medicines than just these,” says clinic director Cleona Durham. “There are people on disability who really, really need it, but they don’t qualify to come to us,” and the same is true for people on Medicare, she said.

Some of the most substantial help for the poor, in fact, comes from the drug companies themselves, which supply free drugs for limited periods to patients who meet financial guidelines.

"Although it is likely that advertising does influence volume growth, a more salient question to answer is whether or not that growth is appropriate. … If patients, for example, with milder and non-suicidal depression feel better on medication, or if more expensive but less sedating antihistamines improve concentration, are these gains worth the extra costs? If they are, should the patient, the health plan, the employer or society pay for these improvements?”
“Explaining Drug Trends: Does Perception Match Reality?” Health Affairs, March/April 2000

The low-income elderly are particularly hard hit: A study by the RAND Corp. shows that their financial burden for prescription drugs is three times higher than that of middle-income seniors and 10 times higher than high-income seniors. Chronic conditions also more than double the burden, the study found.

The problems for uninsured or underinsured patients are particularly challenging.

People without insurance to cover their prescription drugs have no collective purchasing power. That makes it even harder for them to afford the medicine they need.

As a national average, these people spend 15 percent more per prescription than insurance companies do because insurers and government purchasers negotiate volume discounts. One comparison by the U.S. Department of Health and Human Services estimated that, for the same drug, government programs would pay $24 per prescription, insurers would pay $30 to $44, and the uninsured would pay $52, the full cash price after wholesaler and pharmacy markups.

Among the disadvantages for the uninsured:

They pay much more for drugs than the insured do. The uninsured pay full price for drugs, while people with insurance may have a co-payment per prescription as low as $10. In addition, people who are insured through their employers pay premiums, and sometimes co-payments, in pretax dollars, giving them a tax break that the uninsured do not receive.

The elderly on Medicare often do not have prescription-drug coverage or access to affordable policies. Because Medicare does not cover most outpatient prescription drug costs, many states have set up some kind of discount drug purchasing program for this population. Kentucky is not one of them.

In addition, many insurers which once offered Medicare HMO policies with prescription drug coverage, including Aetna and Humana in Kentucky, have discontinued them because of the expense.

Many insurers also offer so-called Medigap policies, which supplement traditional Medicare, but the prices of those supplemental policies have been rising – nationally, by an average of 37.2 percent in the last three years, according to a study by Weiss Ratings, Inc., of Florida, cited in USA Today.

The following chart demonstrates that Medicare beneficiaries with drug coverage spend less out of pocket than those without drug coverage. At the same time, the “total spending” of those with drug coverage is higher – they can afford more prescriptions – because their insurance pays part of the cost.

Income as percent of poverty	Covered, avg. total spending	Covered, avg. out-of-pocket	Not covered, avg. out-of-pocket
Below poverty	$800	$200	$368
Up to 135 percent of poverty	$767	$269	$476
136-150 percent of poverty	$673	$272	$555
151-175 percent of poverty	$790	$279	$453
176-200 percent of poverty	$791	$255	$512
201-300 percent of poverty	$778	$284	$487
301-400 percent of poverty	$782	$264	$453
Above 400 percent	$717	$248	$525

Source: U.S. Health and Human Services "Report to the President: Prescription Drug Coverage, Spending, Utilization, and Prices," April 2000.

The uninsured often go without needed drugs, which can actually increase health care costs. Local doctors reported in the UK survey that a fifth of their patients go without needed health care and cannot get their medications because of cost. Nationally, studies show that the uninsured are much less likely to take medicine they have been told they need than are the insured. And when prescription costs are shifted to the elderly and welfare recipients, their use of essential drugs declines, studies show. As a result, they develop more serious medical needs and make more emergency-room visits.

People who do have insurance are also struggling with prescription drug costs.

The 20 percent of Daviess Countians who report they cannot afford prescription drugs considerably exceeds the nine percent who have no health insurance. This is clear evidence that the high costs affect a broad segment of the population.

Insurance costs themselves present another challenge: They are higher in Daviess County than in many other parts of Kentucky. And as drug costs force insurance premiums even higher, more people are at risk of being unable to afford basic coverage.

According to state Insurance Commissioner Janie Miller, insurance companies say that doctors and hospitals in Owensboro and other parts of Western Kentucky aren’t interested in taking part in their managed-care plans. The doctors and hospitals, meanwhile, typically argue that insurance companies are not offering to compensate them fairly, she said.

Daviess County did try to make affordable insurance available through a community-sponsored HMO, MedQuest, which was created in 1996. However MedQuest’s low-cost policies lost money and the program went under after raising rates – and losing customers as a result – in 1999.

It is unclear how or whether insurance coverage and costs affect the cost of health care and prescriptions locally, but certain distinctions about Daviess County are worth noting:

There is little competition in the medical community. Reimbursements to doctors and hospitals are the biggest factor in the cost of insurance premiums. Daviess County has only one hospital and a shortage of doctors. Thus there is little incentive for health-care providers to negotiate with a variety of insurance companies to be reimbursed at discounted rates by lower-cost health plans, according to interviews with representatives of the health care and insurance industries.
Insurance is more expensive here, and options are limited. The state of Kentucky must pay $321 per month for every state worker in Daviess County for health-plan coverage; statewide, only two counties have higher costs and most others are lower. In Franklin County, for example, the state contribution is $245. In addition, the only insurance coverage available to state employees in Daviess County are three policies from one insurer, Anthem Blue Cross/Blue Shield. In contrast, employees in Franklin County may choose among 12 policies from three insurers.
Recruiting more doctors is a challenge. According to the UK Health Needs Assessment, Daviess County has fewer primary care doctors for its population than Kentucky does as a whole (47 per 100,000 compared to 56 per 100,000).

It also has fewer fewer primary care doctors than other mid-sized communities and their home counties. The following figures are based on a report from the State Office of Rural Health:
Bowling Green/Warren County – 64 doctors per 100,000
Madisonville/Hopkins County – 56 per 100,000
Somerset/Pulaski County, 53 per 100,000

Owensboro-area patients reported that it took 12 days and sometimes as long as 90 days to get a doctor’s appointment.

Perception: Working people have to pay more of their own health-care costs than they used to.

Reality: Actually employers have been picking up more of the cost of health coverage and prescription costs in the last several years, in part because of the booming economy and labor shortage:

Since 1990, the consumers’ out-of-pocket share of drug costs has dropped from 48 percent to 28 percent, according to the National Institute of Health Care Management. Most of the balance has been made up by private insurers (and thus employers). That’s one reason, experts say, that prescription-drug spending has risen so significantly — because consumers have not experienced the “sticker shock” directly.
The percentage of Americans under 65 covered by health insurance has been increasing since 1994 and is now at about two-thirds of the population. Also increasing has been percentage of workplaces, including small employers, offering coverage, noted the Kaiser Family Foundation Employer Health Benefits 2001 report.
Employers’ first response to the rise in insurance costs in recent years was to cut back on offering health coverage to future retirees. Two-thirds of large employers offered such benefits in 1988 compared to 34 percent last year, the Kaiser report said. Employers refrained from passing on premium increases to employees because of competition for workers in a strong economy. Now that the economy is slowing, however, that is changing. Just this year, state and university employees in Kentucky saw their portion of health-insurance premiums rise by as much as 40 percent.

Perception: Insurance premiums are going up because insurance companies cannot afford to cover all these prescription drugs.

Reality: To be sure, the cost of prescription drugs is rising for insurance firms by as much as 20 percent per year. But prescription drugs account for only a small portion of overall health care spending — about 8.5 percent, according to Tufts University researchers. By comparison, hospital spending accounts for a third of the total cost of health care.

Thus it may be that other health-care costs are driving premium increases as much or more than prescriptions. In the fall issue of Health Affairs, J.D. Kleinke of the Health Strategies Network cites the Tufts research in arguing that “even a 20 percent annual increase in a care component that represents only 8.5 percent of all spending (for insurers) does not explain premium increases of the same magnitude.”

In Kentucky, for instance, the cost of state employees’ prescription drugs increased by 17 percent between 1999 and 2000. But the state’s spending on prescriptions as a percentage of overall medical care grew only one percent, from 18.1 percent to 19.1 percent.

A survey of Medicare supplement providers in the Owensboro area found the cheapest premium for a supplement with drug coverage, offered by AARP, was $132 per month. This covers half of outpatient drug costs after a yearly deductible of $250 and up to a maximum benefit
of $3,000.

Existing Efforts
What is currently being done to address the problem?

Nationally, government and industry are looking for ways to help the uninsured and underinsured — as well as to cut or shift costs for prescription drugs.

These efforts don’t always complement each other. For instance, the federal government is considering offering drug coverage to Medicare recipients.

At the same time, some private insurers are already getting out of the business of offering Medicare HMOs which offer drug coverage, and supplemental Medigap policies have become more expensive.

Early in 2001, state governments tried to step into the breach by improving or adding discount drug programs for the elderly and the poor. More recently, however, they have been looking for ways to trim budgets in the face of lower-than-expected tax revenues and higher prescription-drug costs for state employees and Medicaid recipients.

In the private sector, meanwhile, insurers are raising the premiums that employers pay for their health plans, and employers are passing those costs along to employees.

Changes in federal programs and industry practices may offer some relief in the future, but that relief will be limited. Although federal officials insist they still want to provide prescription-drug coverage for Medicare recipients, they concede it is not likely to happen in the near future. The cost of the new war on terrorism, coupled with a slowing economy, probably will delay such a benefit.

In the meantime, the Bush administration has proposed a discount card to cut drug costs for Medicare beneficiaries. Some drug companies and other businesses are offering similar cards, and discounts are also available through online and mail-order pharmacies. Although these options give the uninsured a break on prices, they are not comparable to the price breaks for insured patients who have predictable co-payments.
States are trying a variety of approaches to help the poor and uninsured, but the slow economy is hurting those efforts. At least 43 states, not including Kentucky, were trying to establish or expand pharmaceutical assistance programs in early 2001, according to CongressDaily.

A few examples:

Illinois created a drug benefit for seniors who are ineligible for Medicaid and lack private insurance coverage.
A group of Northeastern states joined in a purchasing pool to try to provide discounts to Medicaid beneficiaries and some state residents not covered by public health programs.
In West Virginia, more than 400 pharmacies joined a new drug-discount program for all residents older than 60.

On the other hand, states are also struggling to cap rising Medicaid drug costs and employee premiums. West Virginia is joining several other states to buy drugs in bulk to lower prices for their state employee and retiree health plans. And states such as Maine have considered price controls on prescription drugs, although such caps are not yet in place.
Insurers and employers are giving employees financial incentives to use cheaper drugs. In part because of rising prescription drug costs, about three-fourths of all large employers were expected to raise employee premiums by the end of 2001, according to the Kaiser Family Foundation Employer Health Benefits Report for 2001.

Perception: Requiring people to pay more of the cost of their drugs may keep them from spending so much on medicine that is unnecessary or too expensive.

Reality: It may well do that. But it may also increase health-care costs overall because higher prices for drugs discourage some people from taking the medications they need to stay out of the hospital.

According to a report in the January 2001 Journal of the American Medical Association, elderly people and welfare recipients who cut back on their use of essential drugs after more of the cost of the drugs was shifted to them doubled their rates “of serious adverse events and emergency-department visits associated with these reductions.”

Says a report by Merck-Medco, the pharmacy benefits manager, “When the cost-share increases exceed 10 percent … the utilization of essential medications for chronic conditions such as hypertension and diabetes is reduced, which could lead to higher health care costs and negative outcomes.”

At the same time, community programs which have provided free medical care and prescriptions to the elderly and poor, including Project Access in Asheville, N.C., and SkyCAP in Eastern Kentucky, have recorded dramatic decreases in the costs of hospital and emergency-room care for their clients.

Congress last year considered spending up to $300 billion on a drug benefit for seniors over 10 years, according to media reports. At best, such a plan would have required seniors to pay about $53 a month in premiums and would cover only half the cost of each prescription until a person’s out-of-pocket costs reached $3,500.

According to the Kaiser Family Foundation, seniors participating in focus groups believed that “even a premium of $25 as a hypothetical seemed high, and a $50 premium was perceived as out of reach for
most seniors.”

To provide benefits similar to most workers’ plans, with low-cost medicines in exchange for modest monthly fees, the tab would be $750 billion, media reports said.

Insurers and employers are also changing the structure of their drug benefits so employees pay more for brand-name drugs. These are known as tiered drug plans. Generic drugs and those on an insurer’s approved list or formulary cost less than brand-name and non-formulary drugs. According to pharmaceutical-benefits manager Merck-Medco, nearly half of all HMO enrollees will have a three-tiered drug plan by the end of 2001. Some companies are also considering four- and five-tier plans.

In addition, Humana and other insurers are responding to rising costs by experimenting with defined contribution plans that give employees a set amount of money to spend on insurance for the benefits they prefer rather than providing the same benefits to all.

Kentucky, as a state, has taken a fragmented approach to dealing with high prescription drug costs.

As an employer and provider of Medicaid services, Kentucky has taken steps to pass along costs to employees and limit access to the most expensive drugs for the poor. However Kentucky has not yet joined other states in purchasing cooperatives to reduce costs, nor has it offered a discount program for low-income seniors as have most other states.

The state has supported a private nonprofit effort to help provide prescription drugs to the state’s poorest citizens. However, that program, Health Kentucky, is not an option for anyone with insurance, which would include Medicare recipients without drug coverage. There are other efforts around Kentucky to deal with the issue on a regional or community basis, but those efforts are limited in scope and independent of each other.

Kentucky state government has taken steps to control drug costs in the Medicaid program and state employee insurance plans.

Medicaid
Medicaid drug spending in Kentucky increased 31 percent between the 2000 and 2001 fiscal years, following a prior year increase of 24 percent. The escalation was fueled at least in part by legislation that required Medicaid to make new drugs (as well as those similar to the new drugs) available without restrictions during their first year on the market. To deal with the resulting $163 million shortfall for the 2001-2002 fiscal year, state officials issued emergency rules to reinstate a system under which doctors must get Medicaid’s approval before prescribing more expensive drugs. Officials will ask the 2002 General Assembly to make the change permanent.

State employees
The Kentucky Group Health Insurance Board, which oversees state employees’ insurance system, has also taken several steps to mitigate the impact of higher drug prices. These range from three-tier co-pays to limiting quantities of certain drugs to requiring prior authorization for some drugs. In October 2001, the board recommended that the state offer employees and retirees the chance to save up to a third of their co-payments for maintenance drugs by using a mail-order pharmacy that allows them to order in 90-day increments. Kentucky also should consider other cost-saving measures such as joining a purchasing pool, the board said.
The Health Kentucky program offers free drugs to uninsured Kentuckians whose incomes are at or below the poverty level. In existence for more than a decade, Health Kentucky (or the Kentucky Physicians Assistance Program) negotiates with doctors for free medical care and with drug manufacturers for free drugs. Currently eight drugmakers provide some or all of their products to the program. Patients who are found to be qualified by the state Department of Social Insurance are sent to participating doctors who then send them to participating pharmacies to fill prescriptions.

But, “Half my staff doesn’t know about it,” said Owensboro Mercy Health System CEO Greg Carlson, who sits on the Health Kentucky board. To combat a lack of awareness of the program in Daviess County, the Public Life Foundation has awarded a $3,000 grant to the organization to do more to publicize itself locally. Other challenges for Health Kentucky include whether to cover more clients by raising the income-eligibility criteria and how to make the program more user-friendly.
Many regions and communities in Kentucky are providing free drug assistance, but there is little coordination or cross-pollination of ideas. From a foundation-funded, community-wide effort in Louisville to free clinics in small towns across Kentucky, communities all over the state are trying to provide free drugs to their poorest citizens.

Some of these efforts, such as Faith Pharmacy in Lexington, are sponsored by churches or religious organizations. Others, such as American Medical Pharmaceutical Outlet, the online Shelbyville company that helps people get free drugs, are private initiatives. In addition, the state and University of Kentucky support the Kentucky Homeplace program that serves counties in Eastern and Western Kentucky by using lay workers to help people meet health and other needs, including finding prescriptions.

Efforts in Kentucky

Following is a list of some of the pharmaceutical assistance programs around the state.

Health Kentucky, Inc., Kentucky Physicians Care Pharmaceutical Assistance Program serves uninsured residents with incomes below 100 percent of the federal poverty level.

Medication is provided free through donations from drugmakers. The state Department of Social Insurance determines eligibility. Patients go to participating doctors, who write prescriptions that patients take to participating pharmacies.

Pharmacies report the prescription to Health Kentucky, which reports it to drugmakers, which reimburse the pharmacies with medication. The drugs provided include only what Health Kentucky has negotiated for free from the drugmakers, which means that while patients can get some common (erythromycin) and/or expensive drugs (Celebrex, Lipitor), they are also eligible for so-called lifestyle drugs such as Retin-A and Viagra.

Kentucky Free Health Clinic Association reports there are at least 29 free clinics across the state, primarily in far western, far eastern and central Kentucky. Among other things they help clients apply for free prescriptions from drugmakers and Health Kentucky and dispense free drug samples provided by physicians who work with them; some clinics purchase medication for patients if it’s not otherwise available. Still others, such as St. Luke’s in Hopkinsville, work directly with pharmacists. Charitable contributions from the community support the bulk purchase of medications.

American Medical Pharmaceutical Outlet, Shelbyville connects low-income people (generally individuals earning less than $16,000 and households earning less than $25,000 with no insurance) with free drugmaker programs. The cost is a onetime $20 registration fee plus a $10 processing fee for each application. It usually takes 10 to 12 weeks after submitting a form to get medication in supplies that last up to 90 days.

Foundation for a Healthy Kentucky provides no direct assistance but does research and recommends solutions to health-care problems; it is funding endowed chairs at the universities of Louisville and Kentucky in urban and rural health-care policy, respectively. The foundation may look at prescription-drug costs, according to chairman Laurel True. The foundation is funded with $45 million from the 1999 settlement of a state lawsuit against Anthem Insurance; it will have $2 million per year to spend on projects.

Kentucky Homeplace, which serves Eastern, South Central and far Western Kentucky, uses lay workers from low-income clients’ communities to help them get needed care, including prescriptions. Over the years it has provided clients with $1 million in free prescription drugs. The program is funded by the state of Kentucky and is administered by the University of Kentucky Center for Rural Health in Hazard.

Louisville/Jefferson County Communities in Charge Coalition/getCare Health Plan is funded with $700,000 from the Robert Wood Johnson Foundation and $780,500 from a coalition of local groups including government and health-care organizations. It is developing a centralized system to provide health care and medication to the uninsured whose income is 200 percent (about $35,000/yr for a family of four) of the poverty level or below. Its services will include helping the uninsured find ways to pay for prescription drugs through drugmaker programs, Health Kentucky and other avenues.

Faith Pharmacy. Faith Pharmacy in Lexington, a mission of Maxwell Street Presbyterian Church and Christ the King Cathedral, depends on samples from pharmaceutical companies. Drugs not available in sample format are purchased with funds from private and corporate donations. The pharmacy, which is open on Saturday mornings, is operated solely by volunteers. Patients must be referred by churches, doctors, nurse practitioners or recognized social service agencies. The referral verifies that the patient does not have health insurance or cannot afford his or her medications at the current time. While the patient is waiting, volunteers fill out drug assistance program forms.

Caritas Health Services “medicine bank” program in Louisville. The nonprofit hospital provides about $100,000 a year to help people pay for medicines to meet short-term needs. The program is administered by four community ministries in southern Louisville and Jefferson County. In addition to buying medications with the Caritas funding, the program links people to other programs that provide free drugs.

Association of Clinicians for the Underserved. This national organization, based in Lexington, publishes information about how to provide prescription drugs and other forms of medical care to the uninsured and underinsured.

Many agencies and health care providers in the Owensboro area have their own programs to help the poor get prescription drugs. However there is little or no coordination of these efforts, which typically are independent of each other.

In interviews for this report, leaders of some of these efforts did not know about others that might offer additional assistance to the population they serve. In addition, many of the local programs depend on free prescriptions from drug manufacturers, which provide a temporary supply of brand-name drugs that are costly for those with chronic conditions to continue.

Among the efforts taking place locally:

Providers and agencies are tapping into drug-company programs that provide free medicine to the poor. These include the Green River Area Development District and the area’s two free clinics, as well as the Green River Heart Institute and other doctors’ offices. In addition, the Daviess County Diabetes Coalition is using new software, RXAssist, which helps nonprofits with the various drug manufacturer's programs.

Drugmakers also provide drugs free through Health Kentucky, which has 63 participating doctors and 15 participating pharmacies in Owensboro, according to director J Scott Judy.
Some agencies pay for medications themselves. The Help Office, the Free Clinic, the St. Vincent DePaul Society and the Boulware Center Mission all have funds designated for buying prescription drugs for their clients; however, these funds are extremely limited. These and other agencies also receive help from local pharmacists, who provide discounted prescriptions to clients referred to them by the agencies.
Some providers give out free samples. Greg Carlson, chief executive officer of Owensboro Mercy Health System, said that some uninsured people come to the emergency room for care because they know they will be able to get a limited amount of free drugs to meet their needs for a short time. Many physicians’ offices also provide free drug samples to patients who need them, but those samples are limited both in quantity and type. Conversely, some drug samples wind up being discarded because they become outdated before they can be used, according to staff members of local health-care providers.

Local Efforts

Many patients receive help from their doctors’ offices to fill out drugmakers’ forms for free medications, and area churches and other organizations may be solicited to pay for prescriptions for low-income patients. In addition:

The Green River Area Development District sponsors a volunteer program that connects people to free prescription drugs through drug-manufacturer programs. Volunteers help fill out paperwork that the patient then takes to a doctor, who signs it and generally receives and distributes the medications. The GRADD volunteers see about 30 or 40 people a month, often elderly patients coping with heart problems, high blood pressure or diabetes.
McAuley Clinic assists patients by filing the paperwork for drug-manufacturer programs; the patients pick up the drugs at the clinic. It also provides free samples or refers to other sources of help, including the Help Office.
The Green River District Health Department files paperwork for drug-manufacturer programs, mostly for residents of outlying counties.
The Free Clinic of Owensboro, Inc., serves working uninsured people with incomes of up to 185 percent of the poverty level. It files paperwork with drug companies and dispenses medicines. The clinic also has a $22,000 annual budget for generic medications.
The Help Office pays for prescriptions for people who are qualified through a brief interview. They are referred to a pharmacy that quotes the lowest drug price. If someone needs ongoing help, he or she is referred to the GRADD program for help applying for drug-company assistance.
The St. Vincent DePaul Society pays the full cost of prescriptions for clients it deems needy through an interview; the money comes from the proceeds of its thrift stores. The society deals with two local pharmacies that it pays directly for the prescriptions.
Local school systems in Daviess County use funds donated by the Rotary Club for medical care and/or prescription and over-the-counter drugs. The fund is used for children who have pressing needs but whose families, in most cases, do not have insurance and do not qualify for the Kentucky Children’s Health Insurance Program.
The Boulware Center Mission, which provides emergency and transitional housing for those who are chemically dependent and trying to get sober, serves its own residential clients. A local pharmacy helps it provide prescription medications. The center also networks with service providers such as River Valley Behavior Health and Western State Hospital, which has a $5 charge-per-prescription program.
The Daviess County Diabetes Coalition is starting a patient-assistance program to cover supplies and medications on an emergency, temporary basis until other ways of paying for them can be arranged. It will use RXAssist from Volunteers in Health Care, a free software package for nonprofits which helps with drug-company program paperwork.
River Valley Behavioral Health helps patients get drugs through manufacturers and an income-based program through Western State Hospital. It also supplies some samples.
The Ohio Valley Medical Center helps patients get drugs through drug manufacturer programs.
The Immediate Care Center provides free samples if available.
OMHS Convenient Care Center provides free prescription samples.
OMHS Emergency Room/Pharmacy provides a limited amount of free drug samples when available to help patients until prescriptions can be filled.
Multicare of Owensboro, an immediate care center and family practice, provides free samples when available and helps family-practice patients obtain prescriptions through drug-manufacturer programs.
Health Kentucky Inc. has 63 local physicians, 15 pharmacies and two dentists participating in the program. In mid-2001 it reported serving 141 clients and 16 of their family members in Daviess County.

“Every day I come to work and wonder who’s going to hit me with $1,000 worth of prescriptions that day, and I’m going to have to look at them and say, ‘I’ll try.’”

Dana Froehlich, coordinator of the Green River Area Development District prescription assistance program

Possible Solutions
What could be done, locally, to address the problem?

Some of the problems of prescription drug spending — drug pricing by manufacturers, premium hikes by insurers, regulatory policies set by the FDA – seem all but insoluble for local citizens and communities. Although it is certainly possible to advocate for changes in those areas, there is little to be done directly:

"The local level has the last advantage in addressing this kind of issue because there is power in numbers," said Julia Costich, a health-care policy researcher at the University of Kentucky. "Trying to solve or even address this issue on a community-specific basis really is a struggle. … At bottom, this is a problem that needs to be resolved nationally, at a federal level."

Yet Costich actually encourages local initiatives, describing them as "the only tools we have." Others in Kentucky point out that, while rising drug costs are a national problem, they affect individual communities differently. “Local people can better assess their own situations than someone from far off,” said Judy Jones, director of the Kentucky State Office of Rural Health. And while academics and others can offer guiding principles, “exactly how those are applied is best understood by local people,” Jones said.

Deciding Who to Help

One of the first tasks for any community looking to help its population with health costs or prescription drugs is deciding who needs help the most, and where to draw the line for assistance.

Should efforts target the uninsured? The elderly? Those with chronic conditions? Most communities try to take on the neediest cases, simply because resources are limited. Fortunately, children from poor families in Kentucky and Daviess County receive assistance through Medicaid, the Kentucky Children’s Health Insurance program and free care from local providers, noted local pediatrician Don Neel.

Otherwise, “I think it’s going to be a matter of helping those who can’t afford it,” he said. That’s a big group. In addition to uninsured adults, it could include local Medicare recipients without drug coverage, rural residents with transportation problems and small employers who cannot afford insurance for themselves, much less their employees.

Community-based health programs offer models that Daviess County could adapt.

Other communities, including some in Kentucky, have found that by coordinating services and sharing the load of health care for the needy, they can ease the burden on the uninsured as well as on local providers.

These programs typically require that all stakeholders – from consumers to doctors to social-service providers – have input into both planning and implementation. Some of these programs are funded with help from local, state or federal governments; others depend in part on grant awards. In general these programs are expected to become self-sufficient – with a local source of funds – within a few years.

Project Access in North Carolina combines primary care and prescriptions to provide care for the uninsured. Run by the county medical society, Project Access draws on a broad array of community resources to serve the needy:

1. County government spends $300,000 per year on discounted prescription drugs.
2. Doctors and pharmacists donate their time or dispensing fees.
3. A computerized system keeps tabs on all this care so that it is evenly distributed.
4. Providers get credit for what they do.

Doctors are motivated to take part in Project Access because they know their patients will get the prescriptions they need, said project director Alan McKenzie of the Buncombe County Medical Society. In addition, the cost of charity care at the local hospital has dropped by more than a fourth, and the percentage of the uninsured patients using the emergency room for primary medical care has decreased from 18 percent to 8 percent.
SKYCAP and Kentucky Homeplace in Eastern and Western Kentucky help the needy where they live. Kentucky Homeplace, funded by the state of Kentucky, pays lay workers from the community to work with the needy in their own homes to meet medical and quality-of-life needs that range from better housing to prescription drugs. The program serves eight counties in the Purchase area of far Western Kentucky and most of southeastern Kentucky. The lay workers help their clients tap into free drugmaker prescription programs, Health Kentucky and other options. Health care costs have dropped dramatically for Homeplace clients over the years, and now Harlan and Perry Counties have received a federal Community Action Program grant for a similar, more local initiative, SKYCAP. In Harlan County, in the year before SKYCAP began, hospital costs incurred by clients were $516,000; the year after those costs dropped to $81,000. Likewise, emergency room costs dropped from $49,000 to $8,500. And Perry County showed similar cost declines, said SKYCAP director Fran Feltner.
Louisville/Jefferson County Communities in Charge Coalition is streamlining services for the uninsured. This group, is funded with $700,000 from the Robert Wood Johnson Foundation and $780,500 from a coalition of local groups including government and health-care organizations. It is developing a centralized system to provide health care and medication to the uninsured whose income is 200 percent (about $35,000/yr for a family of four) of the poverty level or below. Its services will include helping the uninsured find ways to pay for prescription drugs through drugmaker programs, Health Kentucky and other avenues.

Some local organizations might be able to tap into the federal government’s programs to provide discounted drugs to those who need them.

The U.S. government offers two ways for certain local clinics and hospitals to provide discounted drugs to patients – the 340B Drug Pricing Program and the Prime Vendor Program.

The programs allow qualified clinics and hospitals to buy certain prescription drugs at a discount, offering patients savings of 25 to 50 percent. In addition, they may work with a prime vendor or wholesaler who can provide some drugs at a further discount. The federal government also has a pharmacy demonstration project which provides funding for communities that want to develop low-cost medication programs.

Organizations in Owensboro such as the Green River Health Department may be eligible to take advantage of these programs (the only eligible hospitals in Kentucky are those at the universities of Kentucky and Louisville). The programs are generally limited to agencies that get federal funding to provide services to the indigent or to specific classes of patients such as migrant workers or those with AIDS. Discounted prescriptions can be distributed through on-site or contract pharmacies.

Clinics and hospitals must meet certain requirements to take part in these programs. The local health department qualifies for federal discounts for prescription drugs for some very limited programs, such as TB prevention and prenatal care. But it does not have a primary-care clinic at which doctors prescribe a wide range of medications. It is in the process of expanding, however, and may provide primary care services in its new building, said director Lamone Mayfield. Such a program may be able to tap into the federal discount program, she said.
Communities have set up pharmacies that take advantage of these programs. Some communities with free clinics, such as Charleston, W. Va., and Pittsburgh, Pa., dispense prescription drugs through on-site pharmacies that are eligible to receive the federal discounts. Others contract with off-site retail pharmacies to fill the discounted prescriptions.
These community pharmacy programs use other sources of low-cost drugs as well.
Some have:
• developed systems to obtain extra samples from local physicians’ offices.
• made purchasing agreements with local retail pharmacies or drug wholesalers.
•negotiated with major drug companies for low-cost or free medications outside of the company’s indigent patient assistant program.

A centralized processing center could give local providers and health agencies relief from time-consuming administrative chores.

Part of the problem with prescription-drug assistance in Daviess County is that providers and organizations are often unaware of what’s available locally. At the same time, those who provide services have lots of paperwork to complete, particularly for the drugmaker programs for the indigent. Each manufacturer has a different form and different requirements, and physicians must sign the forms for the drugs to be delivered. Delivery time also takes several weeks, and patients may need medications in the meantime.

There are national efforts under way to convince the drugmakers to develop a common application form, but using drugmaker programs will still require coordination. There also are many other local efforts to help the needy – including discount cards now being offered by various drug companies and organizations.

This is why the notion of a processing center has gained ground among some of the organizations that provide these services.

“There needs to be, particularly for the elderly, a point of entry that a person can go to and be directed into whatever service or provider that person needs,” said Lamone Mayfield, director of the Green River District Health Department.

Noted Brenda Clayton, executive director of the Ohio Valley Physicians Association who formerly helped coordinate the drugmaker assistance program at Green River Heart Institute, “None of it’s impossible. It’s just going to be a coordinating job."

There’s clearly a need for coordination. Linda Dant of the McAuley Clinic says getting prescription assistance for the clinic’s patients “could be a full-time job.” She suggests a small endowment to generate income to pay for some medicines and paid staff to administer a processing center. Already the Green River Area Development District is providing some of these services, but with volunteers. Dana Froehlich, coordinator of the GRADD prescription-drug assistance program, said there is a part-time paid administrator in the ADD’s Henderson office, which has been a big help.
Location is a major consideration. Where would patients be most likely to come – and what location would be most convenient for providers? Health department director Lamone Mayfield suggested that a coordinating office could use space in the department’s new building. The OMHS HealthPark facilities also have been suggested as a site. Still, these locations don’t necessarily address the necessity of serving rural residents, another consideration.
A computerized system could help coordinate assistance. Drug company forms, price comparisons, a list of available local programs and how to qualify for them – all this information is critical to coordination efforts. The SKYCAP program in Harlan and Perry counties, for instance, uses a computer program to keep track of when the program’s lay workers should help clients re-order drugs from the manufacturers, director Fran Feltner said.

More information about drug prices could help consumers and their doctors explore less expensive therapies or medications.

Because many elderly people on Medicare, as well as the uninsured, must pay full price for drugs, it is important that they find the lowest-priced prescriptions.

Prices for the same drugs differ significantly at Owensboro pharmacies, according to a telephone survey. That’s not unusual, according to reports from other states. The Center for Florida Consumers found that patients could save more than $600 a year on prescriptions if they comparison-shopped. The price variations have to do with wholesaler and pharmacy markups, although most of the money goes back to the manufacturer. Wholesalers and pharmacies generally have very small profit margins. Volume also makes a difference: Drugs may be cheaper at mail-order or online pharmacies, which also have a big price range. Internet sites such as www.PillBot.com compare online prices.

The chart shows that prices for a month’s supply of medication can vary widely among drugstores, and there is not a clear distinction between the prices at independent and chain pharmacies. It also shows that the generic version of a drug can be much cheaper than the brand version.

Price Comparisons	Humulin N	Vasotec 20mg brand/generic	Prilosec 20mg
Owensboro
Danhauer Drugs (ind)	$25.30	$54.60/$35.90	$129.00
Nations Medicines (ind)	$21.50	$50.30/$35.01	$113.21
Mills Drugstore (ind)	$22.00	$47.50/$21.50	$119.50
Rite Aid	$27.99	$57.69/$45.69	$139.99
Kroger	$23.49	$57.99/$26.29	$132.39
Walmart	$21.23	$51.84/$22.46	$120.97
Winn Dixie	$25.99	$47.29/$23.39	$134.41
Online
Drugstore.com*	$24.34	$45.76/$25.14	$108.04
PharMorWebRx.com*		$44.19/$17.00	$101.41
Frankfort
Fitzgerald (ind)	$22.89	$49.00/$17.89	$122.00
CVS	$34.16	$62.59/$50.59	$128.99
Rite Aid	$25.99	$53.99/$45.99	$125.99
Medicap	23.09	$54.09/$18 or $19	$120.59

*plus shipping
Prices from Owensboro pharmacies were gathered Sept. 5-7, 2001; prices from Frankfort were gathered Nov. 15, 2001; prices from online pharmacies were gathered in October and November 2001.

Doctors need more information, too. Doctors typically don’t have time to compare the cost of different drugs in a systematic way, said Brenda Clayton of the Ohio Valley Physicians Association. At the same time, studies show, physicians regularly hear from drugmaker salespeople who encourage them to prescribe their latest products. These products may also be the most expensive.

Doctors do welcome solid information from other sources, Clayton said. One industry trend that may help is electronic prescribing. Pharmacies and pharmacy benefits managers (companies which handle claims for insurance companies) are launching these services. They can reduce the chance of medical errors as well as give doctors and their staffs immediate information about drug costs, insurance coverage and alternative medicines.
Better communication between doctors and patients is critical. Barbara Quick of the Help Office in Owensboro said the biggest challenge she sees is the lack of communication between patients and physicians. Doctors may not know the cost of the drug they are prescribing for a patient. At the same time, patients may not want to tell the doctors about financial hardship because they don’t want to be viewed as difficult. One answer, suggested at a citizen forum, would be to include a question about the ability to pay for medications on the forms patients typically fill out at doctor’s offices about their insurance and health histories.

Key Health Care Initiative
Public Life Foundation of Owensboro
Through 2001

Health Needs Assessment
Obtained proposal from University of Kentucky for the first comprehensive health needs assessment of the people of Owensboro-Daviess County and with others expanded the proposal to include people in the entire Green River Area Development District.
People’s Health Forums
Convened and moderated more than 40 discussions that included citizens from all walks of life who shared their thoughts on the major findings of the assessment and their own experiences and concerns. The University of Kentucky will tabulate and analyze information from the forums in early 2002; a report of the findings will be released in March.
Citizens Health Care Advocacy Group
Assisted interested forum participants in developing a public voice to sustain efforts to find solutions to fill unmet needs.
Community Access Project
Supported efforts to develop a community-based health system for the underserved in Daviess County, including financial and organizational support.
Prescription Drug Study
Published a comprehensive report to explore how the community can cope with the high cost of prescription drugs, one of the most pressing concerns of people who participated in the forums.
Directory of Community Health Centers
Published directory with detailed information about community health facilities including schedules, staffing and services. Created to counter lack of awareness and misinformation about what’s available locally, it is a useful tool for social workers, school nurses, ministers and others who help people find health care. The forum discussions showed a pressing need for it.
Directory of Primary Care Physicians
Published a list of local physicians and their current availability to new patients. Created to help more people find a “medical home.”
Community Summit on Healthy Lifestyles
Proposed and a sponsor of a major community event in 2002 to encourage healthy lifestyles.
Tobacco Coalition
Financially supported a student coalition that educates and advocates about the dangers of second-hand smoke.

References

Access Project, www.accessproject.org.
Employer Health Benefits 2000 Annual Survey, Kaiser Family Foundation, 2000.
Express Scripts 2000 Drug Trend Report, Express Scripts, June 2001.
First Health Community Voices, www.communityvoices.org.
“FYI: The Cost of Prescription Drugs: Who Needs Help?,” AARP Public Policy Institute, October 2000.
“Green River Area Development District Health Needs Assessment,” University of Kentucky, 2000.
“How Much are Medicare Beneficiaries Paying Out-of-Pocket for Prescription Drugs?,” AARP Public Policy Institute, September 1999.
“The Implications of Medicare Prescription Drug Proposals for Employers and Retirees,” Hewitt Associates LLC, July 2000.
“Medicaid and the Uninsured: The Role of Medicaid in State Budgets,” Kaiser Family Foundation, October 2001.
“Medicare and Prescription Drug Focus Groups, Summary Report,” Public Opinion Strategies and Peter D. Hart Research Associates, July 2001.
Merck-Medco 2001 Drug Trend Report, Merck-Medco, 2001.
Notes, Citizen Forum, People’s Health Project, Public Life Foundation of Owensboro (Ky.), 2001.
“Owensboro-Daviess County Health Needs 2000 Report,” University of Kentucky, 2000.
“Pharmaceutical Marketplace Dynamics: Expenditures, Distribution, Coverage Pricing,” John M. Coster, Ph.D., R.Ph., National Association of Chain Drug Stores, presentation for National Health Policy Forum, May 2000.
“Prescription Drug Benefits: Cost Management Issues for Medicare,” AARP Public Policy Institute, August 2000.
“Prescription Drug Coverage for Seniors,” Kentucky Long-Term Policy Research Center, August 2001. http://www.kltprc.net/policynotes/Chpt_6.htm
Prescription Drug Expenditures in 2000: The Upward Trend Continues, National Institute for Health Care Management, May 2001.
“Prescription Drug Trends: A Chartbook,” Kaiser Family Foundation, July 2000.
“Public Employee Health Insurance Information,” (booklet), Office of Public Employee Health Insurance, Kentucky Personnel Cabinet, 2001.
“Public Employee Health Insurance Information Plan Year 2000,” (report) Office of Public Employee Health Insurance, Kentucky Personnel Cabinet, and William M. Mercer, Inc., October 2001.
“Recent Trends in Prescription Drug Spending for Insured Individuals Under 65 and Age 65 and Older,” RxHealthValue, July 2001. www.rxhealthvalue.com
“RX R&D Myths: The Case Against the Drug Industry’s R&D ‘Scare Card,’” Public Citizen, July 2001.
“Targeting Medicare Drug Benefits: Cost and Issues,” Marilyn Moon, et al, Kaiser Family Foundation, May 2001.
“The Value of Innovation, Health Affairs, September/October 2001.
Volunteers in Health Care, www.volunteersinhealthcare.org and www.volunteersinhealthcare.org/Reports/ RX.htm .
“What Next for Kentucky Health Care?,” Michal Smith-Mello, Julia Field Costich and F. Douglas Scutchfield, Kentucky Long-Term Policy Research Center, 1999.
“Why Do Medicines Cost So Much?,” Pharmaceutical Research and Manufacturers of America (PhRMA), June 2000. www.phrma.org
Numerous individual articles from newspapers, including The New York Times, The Courier-Journal, the Lexington Herald-Leader and The Owensboro Messenger-Inquirer, and periodicals, including the Journal of the American Medical Association and the Annals of Internal Medicine.

Interviews:
Earl Adams, insurance representative
Mary Anderlik, University of Louisville
Greg Carlson, Owensboro Mercy Health System
Brenda Clayton, Ohio Valley Physicians Association
Julia Costich, University of Kentucky
Linda Dant, McAuley Clinic
Cleona Durham, Free Clinic
Fran Feltner, SKYCAP, Hazard, Ky.
Dana Froehlich, Green River Area Development District
Bob Gray, Kentucky Attorney General’s office
Pat Green, Commonwealth Aluminum
Reid Haire, Daviess County Judge-Executive
Bob Hood, St. Vincent DePaul Society
Clifford Hynniman, University of Kentucky College of Pharmacy
Judy Jones, Kentucky State Office of Rural Health
J Scott Judy, Health Kentucky
Gil Lawson, Kentucky Cabinet for Health Services
Rice Leach, Kentucky Department of Public Health
Lamone Mayfield, Green River District Health Department
Mark McGuire, Kentucky Department of Insurance
Alan McKenzie, Project Access, Asheville, N.C.
Janie Miller, Kentucky Department of Insurance
Dr. Don Neel, Owensboro pediatrician
Curt Newcom, Owensboro pharmacist
Carol Palmore, Kentucky Department of Personnel
Barbara Quick, Help Office
Rose Rexroat, Kentucky Free Health Clinic Association
Jeremy Russom, Project Access, Asheville, N.C.
Joseph Smith, Kentucky Primary Care Association.
Lisa Travis, U.S. Office of Pharmacy Affairs
Laurel True, Kentucky AARP and Foundation for a Healthy Kentucky
Sheila Schuster, Foundation for a Healthy Kentucky and Kentuckians for Health Reform

We would like to acknowledge the invaluable assistance of Susan Sommerfeldt in conducting interviews and gathering information for this report.

Resources

POLICY AND DATA

Henry J. Kaiser Family Foundation
www.kff.org and www.kaisernetwork.org

Serves as a policy institute and forum for analyzing health care coverage, financing and access for the low-income population and assessing options for reform. It also publishes daily and weekly updates on many health topics including prescription drugs.

National Aging Information Center
www.aoa.gov/naic/Notes/presciptiondrugs.html

Provides list of prescription-drug-related web sites, including those with Medicare information, statistics and research, consumer information, etc. Note that prescription is misspelled in the web address!

RxHealthValue
www.rxhealthvalue.com

Provides reports, research and policy information on trends in prescription drug spending. Funded by coaltion of major stakeholders including AARP, insurance companies, etc.

COMMUNITY MODELS

Access Project
www.accessproject.org

Not to be confused with Asheville’s Project Access, this is a program funded by the Robert Wood Johnson Foundation which provides information on health-care access for communities including publications such as “Handles for Organizing a Healthy Community.”

Community Access Program
U.S. Bureau of Public Health Care
www.bphd.hrsa.gov/cap/

Provides funding for community projects, such as SKYCAP in Eastern Kentucky, which address the health-care needs of the underserved.

Community Voices: Health Care for the Underserved
www.communityvoices.org

Aids in community-based solutions for health care including publications such as “Increasing Access: Building Working Solutions,” published in June 2000.

Families USA
www.familiesusa.org

Provides a range of helpful publications and reports for communities and agencies wanting to help the underserved including “Designing a Consumer Health Assistance Program.”

Kentucky Homeplace and SKYCAP
University of Kentucky Center for Rural Health, Hazard, Ky.
606-439-3557
Britt Robinson, Homeplace director, ext. 317
Fran Feltner, SKYCAP director, ext. 257

Uses a system of lay workers to meet the health and other needs of people in far western and southeastern Kentucky.

Louisville and Jefferson County Communities in Charge Coalition
Shavonne Coleman, project assistant
502-583-4690
www.communitiesincharge.org (for information on Louisville’s and other programs)

Coalition/getCare Health Plan is streamlining health services for the uninsured in Kentucky’s largest community. Funded with $1.5 million from a national foundation and local contributions, GetCarehealthplan will use case managers and the county’s computerized public-health database to coordinate and improve services to the uninsured whose income is 200 percent of poverty (about $35,000/year for a family of four) or below. Among other things, the coalition will help the uninsured get prescriptions for free or low-cost drugs through drugmaker programs and Health Kentucky.

Models that Work Campaign
U.S. Bureau of Primary Health Care
www.bphc.hrsa.dhhs.gov/mtw/

Gives details of community health-care models that have been proven effective. Also offers “strategy transfer guides.”

Project Access
304 Summit St.
Ashveille, N.C. 28803
828-274-9820
www.projectaccesswnc.org

Provides health services including prescription drugs to the underserved in the community; serves as a model for several other communities across the country.

Volunteers in Health Care
www.volunteersinhealthcare.org and www.volunteersinhealthcare.org/Reports/RX.htm (for starting a pharmaceutical program)

Provides information about how other communities address prescription drug and other health issues. Also provides software to assist wsith making application to drugmaker programs for free drugs for the indigent.

PHARMACEUTICAL PROGRAMS AND RESOURCES

Association of Clinicians for the Underserved
501 Darby Creed Rd., Suite 20
Lexington, Ky. 40509-1606
(859) 263-0046
www.clinicians.org

Provides information to clinics and agencies serving the poor about how to tap into federal and other programs which can help with prescription drugs.

Database management
IndiCare, www.indicare.com
M&D CARES, 1-888-246-1085
MedData Services, www.meddataservices.com
PAPRx, www.paprx.com
RxAssist Plus, www.rxassist.org

Drugmaker program applications
Needymeds, www.needymeds.com (for general public)
RxAssist, www.rxassist.org (for doctors and other providers)
RxHope, www.rxhope.com (for doctors and other providers)

Other states’ assistance programs
www.ncsl.org/programs/health/drugaid.htm (click on public user)

Patient initiated programs
The Medicine Corner, www.themedicinecorner.com
The Medicine Program, www.themedicineprogram.com
Indigent Patient Services, www.gihs.com/ips/index.html
American Medical Pharmaceutical Outlet, www.medshelp4u.com,
1-888-956-5802 (not in pamphlet)

Pharmaceutical Research and Manufacturers of America
www.phrma.org/searchcures/dpdpap/

Offers directory of drugmaker assistance programs for the elderly. Call 1-800-762-4636 for a copy.

U.S. Office of Pharmacy Affairs
Bureau of Primary Health Care
Heath Resources and Services Administration
1-800-628-6297
www.hrsa.gov.odpp

Administers the 340B discount prescription drug pricing program, the HRSA prime vendor program and clinical pharmacy demonstration projects. Its pamphlet on “Simplifying Pharmaceutical Assistance Programs” includes the following resources that can help local agencies or clinicians:

LOCALLY AVAILABLE PROGRAMS

The Boulware Center Mission
731 Hall St.
Owensboro, Ky. 42303
Linda Roberts, program director
Rosemary Lawson, executive director
270-683-8267

Provides emergency and transitional housing for those who are chemically dependent and trying to get sober, serves its own residential clients. A local pharmacy helps it provide prescription medications. The center also networks with service providers such as River Valley Behavior Health and Western State Hospital, which has a $5 charge-per-prescription program.

Daviess County Diabetes Coalition
Janice Haile, program coordinator
270-686-7747, ext. 5562

Starting a patient-assistance program to cover supplies and medications on an emergency, temporary basis until other ways of paying for them can be arranged.

Free Clinic of Owensboro, Inc.
1600 Breckinridge St.
Ownesboro, Ky. 42301
Cleona Durham, director
270-684-0800

Serves working uninsured people with incomes of up to 185 percent of the poverty level. It files paperwork with drug companies and dispenses medicines. The clinic also has a $22,000 annual budget for generic medications.

Green River Area Development District
3860 U.S. Highway 60 West
Owensboro, Ky. 42301
270-926-4433
www.gradd.com
Prescription Drug Assistance Program
Dana Froehlich, coordinator
1-800-928-9094

Uses volunteers to help the needy complete the paperwork necessary to qualify for drugmaker assistance programs. The ADD also provides general benefits counseling.

The Green River District Health Department
1600 Breckenridge St.
Owensboro, Ky. 42301
Lamone Mayfield, executive director
Gail Wigginton, program director/administrator
270-686-7747

Files paperwork for drug-manufacturer programs, mostly for residents of outlying counties because of the proximity of the Free Clinic. Also, other services are available in Daviess County.

Health Kentucky
12700 Shelbyville Rd.
Louisville, Ky. 40243
J Scott Judy, executive vice-president
Administrative office: 502-245-4214
Hotline for patients: 1-800-633-8100

Provides free medical care for the uninsured whose income is lower than the federal poverty level, currently $16,700 per year for a family of four. Patients call the hotline number to get help determining eligibility and finding a doctor. Prescriptions for Health Kentucky patients are free at participating pharmacies, which are then reimbursed with drugs by participating drugmakers.

Help Office of Owensboro, Inc.
1316 W. 4th St.
Owensboro, Ky. 42301
Barbara Quick, director
270-685-4971

Pays for prescriptions for people who are qualified through a brief interview. they are referred to a pharmacy that quotes the lowest drug price.

The Immediate Care Center
1200 Breckenridge St.
Owensboro, Ky. 42301
Michele Hartung, operations manager
270-683-7553

Provides free samples if available.

Local school systems in Daviess County

Use funds donated by the Rotary Club for medical care and/or prescription and over-the-counter drugs. The fund is used for children who have pressing needs but whose families, in most cases, do not have insurance and do not qualify for the Kentucky Children’s Health Insurance Program.

McAuley Clinic
501 Walnut St.
Owensboro, Ky. 42301
Linda Dant, manager
270-926-6575

Assists patients by filing the paperwork for drug-manufacturer programs; the patients pick up the drugs at the clinic. It also provides free samples or refers to other sources of help, including the Help Office.

Multicare of Owensboro
3515 Frederica St.
Owensboro, Ky. 42301
Shannon Forehand, office manager
270-688-8044

Provides free samples when available and helps family-practice patients obtain prescriptions through drug-manufacturer programs.

The Ohio Valley Medical Center
750 Salem Dr., Suite 1A
Owensboro, Ky. 42301
Brandi Pate, office manager
270-686-8008

Helps patients get drugs through drug manufacturer programs.

OMHS Convenient Care Center
608 Frederica St.
Owensboro, Ky. 42301
Billie Campbell, manager
Jennifer Cecil, business and industry liaison
270-686-6180

Provides free prescription samples.

OMHS Emergency Room/Pharmacy
811 E. Parrish Ave.
Owensboro, Ky. 42303
Debbie Enoch, director
270-688-2905

Provides a limited amount of free drug samples when available to help patients until prescriptions can be filled.

River Valley Behavioral Health
1100 Walnut St.
Owensboro, Ky. 42301
270-689-6500 (office)
270-683-4039 or 1-800769-4920 (appointments_
www.rvbh.com

Helps patients get drugs through manufacturers and an income-based program through Western State Hospital. It also supplies some samples.

The St. Vincent DePaul Society
1001 W. Seventh St.
Owensboro, Ky. 42301
270-683-1747

Pays the full cost of prescriptions for clients it deems needy through an interview; the money comes from the proceeds of its thrift stores. The society deals with two local pharmacies that it pays directly for the prescriptions.

KENTUCKY PROGRAMS

American Medical Pharmaceutical Outlet
P.O. Box 1228
Shelbyville, Ky. 40066
Larry Mann, managing partner
1-888-956-5802
www.medshelp4u.com

Connects low-income people (generally individuals earning less than $16,000 and households earning less than $25,000 with no insurance) with free drugmaker programs. The cost is a onetime $20 registration fee plus a $10 processing fee for each application. It usually takes 10 to 12 weeks after submitting a form to get medication in supplies that last up to 90 days.

Caritas Health Services “medicine bank” program in Louisville
Sister Donna Kenney (initiator of the program)
Caritas Medical Center
502-361-6142
Administrative agencies:
South Louisville Community Ministries, 502-367-6445
Southwest Louisville Community Ministries, 502-935-0310
Fairdale Community Ministries, 502-367-9519
Shively Community Ministries, 502-447-4330

Faith Pharmacy
Street address:
240 E. 7th St.
Lexington, Ky.
Mailing address:
180 E. Maxwell Street
Lexington, KY 40508.
Clif Cason, director
1-859-255-1074 at Maxwell St. Presbyterian Church
1-852-243-0887 at the pharmacy on Saturday mornings
www.faithpharmacy.com

Distributes samples from drugmakers and retail pharmacists. Volunteers run the pharmacy, which is open on Saturday mornings. Drugs go mainly to people referred by local doctors or nurse-practitioners, but the pharmacy also tries to serve anyone who cannot afford medications. The pharmacy also helps people qualify for drugmaker programs.
Provides about $100,000 a year to help people pay for medicines to meet short-term needs. Administered by four community ministries in southern Louisville and Jefferson County. In addition to buying medications with the Caritas funding, the program links people to other programs that provide free drugs.

Foundation for a Healthy Kentucky
Laurel True, chair

Provides no direct assistance but does research and recommends solutions to health-care problems. Has endowed health-care policy chairs at the universities of Louisville and Kentucky.

Kentucky Free Health Clinic Association
Rose Rexroat, director
1-859-313-1109

Clinics help clients apply for free prescriptions from drugmakers and Health Kentucky and dispense free drug samples provided by physicians which work with them; some clinics purchase medication for patients if it’s not otherwise available. Still others, such as St. Luke’s in Hopkinsville, work directly with pharmacists. Charitable contributions from the community support the bulk purchase of medications.

Louisville/Jefferson County Communities in Charge or getCare Health Plan

Coalition/getCare Health Plan is funded with $700,000 from the robert Wood Johnson Foundation and $780,500 from a coalition of local groups including government and health-care and medication to the uninsured whose income is 200 percent of the poverty level (about $35,000/yr for a family of four) or below. its services will include helping the uninsured find ways to pay for prescription drugs through drugmaker programs, Health Kentucky and other avenues.