Newman: Using generic drugs under Medicaid could save Va. $20 million

RICHMOND — One of the less obvious practices many state legislators employ in most years is the budget amendment, which is Virginia’s equivalent of earmarking government funds for special projects such as local museums and the like.

In this year of multibillion-dollar deficits, however, there are fewer budget amendments on file in the General Assembly.

A minus symbol precedes many of the proposals lawmakers have filed, designating the amendments as cuts that could help narrow the gap between revenues and expenses.

State Sen. Steve Newman, R-Lynchburg, suggests that using generic drugs, instead of name brands, in the state’s Medicaid program could save $20 million.

Del. Ben Cline, R-Rockbridge County, is zeroing in on the state lottery’s advertising program again, suggesting that it be cut in half to save $13 million.

Newman and Cline have made these proposals in the past, to no avail.

But with a $2 billion shortfall that Gov. Bob McDonnell and Republican legislators have vowed to close with something other than a tax increase, the General Assembly’s money committees are trying to scrape up every dollar of savings that can win support from other lawmakers.

“For years the General Assembly budget committees have done a nice favor to drug companies, to say that Medicaid prescriptions should give priority to the branded drug when a generic is available,” Newman said.

“This has pumped millions of dollars into the coffers of drug companies,” Newman said.

“We’re in bad economic times and we’re cutting back on education and sheriffs’ funds and other items,” he said, including overall Medicaid funding.

“We should treat Medicaid no better than private insurance,” Newman said.

The senate Finance Committee’s staff calculated his amendment’s potential savings at $20 million over two years. “I wrote the language” of the amendment, Newman said. “They came up with the number.”

Newman said he wasn’t aware of any private health insurance plan that preferred brand-name drugs over generics. In fact, many private plans prefer to use therapeutic-interchange drugs that can be even cheaper than generics, Newman said.

As an example of therapeutic transfer, he said it’s possible that if a doctor recommends the drug Allegra for a sinus problem, some private insurance plans allow the patient to be given Claritin, an over-the-counter product with different drug content.

Newman said his budget amendment to allow use of generic drugs means he is asking for drugs that are chemically identical to the name-brand drugs.

Many of the drugs preferred by brand name in the Medicaid program are used in mental-health treatment programs, he said, and some are used for epilepsy patients.

“It has become in vogue” for drug companies “to come down to Richmond and fight for a particular drug by title,” Newman said.

“That was wrong for the longest time and it certainly is wrong when we are having cutbacks in Medicaid and other government services.”

Cline has argued against the lottery’s advertising program for the last few sessions of the assembly, mostly because of its use of celebrities to sell tickets.

Donald Trump collected $250,000 for the use of his image on lottery tickets, and TV host Howie Mandel was paid $860,000 for use of his image on a game themed after his “Deal or No Deal” TV show, Cline said.

“That money should be going to schools,” Cline said.