Over the past few years, a number of cost saving initiatives have been considered in an attempt to rein in the high cost of prescription drugs. The various proposals have primarily focused on reducing the cost to the state's annual budget by creating a massive bulk-purchasing group for prescription drugs.

In basic terms, the purchasing group would join the Group Insurance Commission (GIC), together with the Department of Public Health (DPH) and Department of Correction (DOC), for the purpose of negotiating and purchasing the prescription drugs required by state retirees, employees, and agencies.

Currently, each of the three state agencies purchase prescription drugs under separate contracts. The theory is that by joining together as one purchasing group, the state will have far greater bargaining power to drive down the cost of prescription drugs.

While the idea of a joint purchasing group is not new (originally put forth in 2000), it has never materialized into action. However, the amendment to the FY05 state budget, sponsored by Senator Mark Montigny (D-New Bedford) and passed by the Senate in May, calls for the purchasing group to be operational by July 1, 2005. The proposal was not included in the House budget passed in April.

Whether or not the joint purchasing group becomes law and what the impact would be for retirees remains to be seen. Association officials are closely monitoring the situation.

"We are a little concerned as to what the potential impact could be on public retirees. However, the concept seems solid, that is join together to get the lower price," said Association Legislative Liaison Shawn Duhamel. "Senator Montigny has assured us that the focus is to create a joint purchasing group, not a new insurance plan for public retirees. According to the Senator, retiree benefits and access to medications would not change. We are going to keep a close eye on the program and make sure that those areas are not affected as the plan moves forward."

Following the lead of several Massachusetts municipalities, as well as other state governments around the country, the state Senate has also included a provision creating a statewide drug reimportation program. This follows more than a year of intense debate between health care advocates and representatives of the pharmaceutical industry.

Unlike the reimportation plans put forth by Springfield, Boston and New Hampshire, to name only a few, the Senate has proposed a more cautious approach. Under the Senate's plan, the Commonwealth would create a state-sponsored website, which would assist Massachusetts residents in buying prescription drugs from certain Canadian pharmacies.

One significant difference between the Senate's proposal and what has been established elsewhere is that the state must first seek the approval of the Federal Drug Administration (FDA) prior to the reimportation website being established. While this requirement may have been viewed as nearly impossible to meet only a few months ago, recent developments in Washington are changing the tone of the debate.

"Members of Congress and officials within the Bush Administration are beginning to change their way of thinking when it comes to importing drugs from Canada. The arguments, that had been put forth by the drug industry citing safety concerns as the reason not to import drugs, has not exactly proven to be true," explained Duhamel. "Americans are looking at the low cost of drugs just over our northern border and are demanding to be allowed access.

"There is no question that something has to be done to get these costs under control. Reimportation may not be a long-term solution, but it certainly is a step in the right direction."

Members, who are insured under one of the insurance plans offered by the state's GIC, have just completed a confusing open enrollment period. With the state creating three new self-insured managed care plans and ending the traditional HMO coverage under Harvard Pilgrim and Tufts for non-Medicare retirees.

While the majority of Association members are enrolled under the Indemnity or OME plans and did not have to switch insurance carriers, many retirees were nonetheless confused as to how the changes would impact them.

The one group, most adversely impacted by the discontinuation of the traditional HMOs, are the municipal teachers (RMTs), insured by the GIC, who are not Medicare eligible and had been a member of either the Tufts or Harvard Pilgrim HMO. Since the GIC's new managed care plans are self insured plans (state assumes risk), RMTs cannot enroll.

The RMT program enrolls retired teachers from 73 municipal and district school systems in the state-run insurance plans administered by the GIC. However, the municipality/district funds the employer's share of the RMT insurance premium. The state law that the municipality/district adopted many years ago, in order to join the GIC plan, does not allow for the RMTs to participate in the self-insured plans.

Despite our Association's efforts to obtain relief for those affected, some teachers have been forced to change plans. They were given the option to join the Indemnity Plan, or one of the remaining managed care plans (Fallon, Health New England, or Neighborhood).