As expected, Gov. Rod Blagojevich Monday signed legislation to create a giant discount purchasing program supporters say will make prescription drugs more affordable for the state's senior and disabled citizens.
The legislation establishes a state-run club that offers a yearly $25-membership card citizens can use at participating pharmacies to receive state-negotiated discounts. The state will use the annual card fees to pay for administrative and management expenses to run the program.
By purchasing drugs as a group rather than individuals, proponents say seniors age 65 and older and the disabled will have more power to win potential discounts from drug makers. The anticipated discounts could average 20% to 30% off the cost of prescription drugs, the governor's office said.
"For far too long, seniors in our state have had to choose between paying for the medications they need and being able to live the lives they've earned," Mr. Blagojevich said. "They shouldn't have to make that choice."
The governor commented on the new program this morning at a housing center for the elderly in Peoria. That's where, during his 2002 campaign for governor, he promised to lower drug costs by leveraging the buying power of Illinois' senior citizens and the disabled with nine state agencies that purchase nearly $2 billion a year in prescriptions for state employees and other state-supported programs.
The governor said he expects pharmaceutical companies, eager for more sales, to join the program and offer lower prices and higher rebates in return for added customer volume. If that happens, prescription costs for citizens not covered by Medicare will drop dramatically, he said.
About 50,000 Circuit Breaker participants?who already receive drug discounts based on income?will be automatically enrolled in the program to help build market share. Officials have estimated that more than 1.5 million people may be eligible for membership in the new club, which seeks discounts regardless of income.
Illinois' seniors will be able to start signing up for the club Jan. 1.
The governor has created a Special Advocate's Office in the Illinois Department of Central Management Services to negotiate lower prices from drug companies. Hypothetically, seniors who pay $130 for Prilosec, an acid reflux medicine, could save up to $40 under the plan, and those who pay $184 for the anti-inflammatory drug Relafen could save $60.
Actual discounts won't be determined until negotiations with the drug companies and pharmacists take place.
"Seniors make up about 13% of our population, but yet they account for 42% of all drug spending," the governor said. "It has become painfully apparent something had to be done and it is an appropriate role for government step in and help."
The governor's office says centralizing the state's drug purchases could save an estimated $120 million this year, helping to close the state's record $5.2-billion budget hole.