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State to discontinue drug savings program

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Hawaii Rx Plus, a state prescription drug discount program for low- and moderate-income residents that never reached its potential, will end in August.

The state Department of Human Services announced Friday that it will discontinue the program because the state’s contract with a private-sector vendor is expiring and no new vendor bid for the work. Free discount pharmacy cards and the availability of federal prescription drug coverage for seniors through Medicare Part D also have driven down consumer interest in the program.

Hawaii Rx Plus, first passed by the state Legislature in 2002 and then refined and implemented in July 2004, was designed for residents who earn too much money to qualify for Medicaid and do not have adequate prescription drug coverage through private insurance. The program was limited to residents who earn up to 3 1/2 times the federal poverty level.

More than 100,000 residents are enrolled in Hawaii Rx Plus, but only about 2,500 took advantage of the discounts last year, according to the state, down from about 6,900 before free discount pharmacy cards were prevalent and Medicare Part D coverage took effect in January 2006.

The state said CVS Caremark, a Rhode Island-based company that in 2008 acquired RxAmerica, the state’s original vendor, did not want to renew the contract for Hawaii Rx Plus when it expires in August.

State lawmakers had hoped Hawaii Rx Plus would unfold in two phases. First, low- and moderate-income residents could purchase drugs from pharmacies for the discount prices the state pays in Medicaid, the government health insurance program for the poor. Second, the state was expected to negotiate rebates with drug manufacturers so participants could get even larger discounts.

The Lingle administration, however, maintained that such negotiations were optional, which prompted lawmakers in 2007 to require the administration to negotiate for rebates. At the time, the administration explained that rebates were unlikely because of the relatively small number of residents enrolled in the program and because many preferred cheaper generic drugs to more expensive brand-name drugs that attracted rebates.

In fiscal year 2008, according to a state report, residents who participated in Hawaii Rx Plus saved 13.1 percent on brand-name drugs and 33.9 percent on generic drugs. The average savings was 25.9 percent.

"I just think it was clear from the outset that the Lingle-Aiona administration did not support the Hawaii Rx Plus law to allow residents of our state to get the kind of discounts in prescription drugs that they deserve," said state Rep. Roy Takumi (D, Pearl City-Momilani-Palisades).

Takumi said he would have likely re-evaluated Hawaii Rx Plus next year given the availability of prescription drugs through free discount pharmacy cards and Medicare Part D.


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