Maloney, Lowey Urge HHS to Ease Birth Control Price Hike

WASHINGTON – U.S. Reps. Carolyn B. Maloney (D-NY) and Nita Lowey (D-NY) today urged Department of Health and Human Services (HHS) Secretary Michael Leavitt to restore access to affordable birth control and other brand name prescription drugs for college and low-income women (full text of the letter below).  The Representatives’ concern stems from a provision of the Deficit Reduction Act (DRA) that went into effect earlier this year and inadvertently caused the price of many brand name prescription drugs - including birth control - to increase at “safety-net” health providers such as campus health centers and community clinics.     

“The cost of prescription drugs in this country is already a burden on too many hardworking Americans.  This unfair price hike hits those people who need help the most: college students juggling sky-high tuition bills and hardworking people struggling to make ends meet with minimum wage jobs.  Working class Americans and college students should not be forced to bear this financial burden and go without important prescriptions,” said Maloney. 

“Access to important prescriptions is key to reducing unintended pregnancies and maintaining the health of college students and working Americans,” said Lowey.  “This price hike is wrong and inadvisable.  It will force many Americans to pay a higher price for necessary medications or go without them altogether.  I urge Secretary Leavitt to re-think this policy and restore access to important prescription drugs.”

By some estimates, women have seen the price of their brand name birth control prescriptions increase by as much as $30 to $40 a month since the price hike went into effect earlier this year.  This financial burden has forced many women to forego birth control altogether, putting them at greater risk of unintended pregnancy. 

Representatives Julia Carson (D-IN), Rosa DeLauro (D-CT), Jay Inslee (D-WA), Betty McCollum (D-MN), Jim McDermott (D-WA), Jerrold Nadler (D-NY), David Wu (D-OR), Jan Schakowsky (D-IL), Adam Smith (D-WA), and Betty Sutton (D-OH) signed on to Maloney and Lowey’s letter to Secretary Leavitt. 

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October 16, 2007

The Honorable Michael O. Leavitt

Secretary

U.S. Department of Health and Human Services

Hubert H. Humphrey Building

200 Independence Avenue, S.W.

Washington, DC 20201

Dear Secretary Leavitt,

We write to ask that you consider clarifying the definition of a “safety net provider” by revisiting the final rule for the Medicaid Drug Program, approved by The Centers for Medicare and Medicaid Services (CMS) on July 2, 2007. In issuing its ruling, CMS neglected to define the term “safety net provider,” indicating that it was unnecessary. We respectfully disagree with this determination.

The Deficit Reduction Act of 2005 included a provision to limit the use of the Nominal Price Exception (NPE) by drug manufacturing companies, in response to convincing evidence that the NPE was not always being used for beneficial purposes. The NPE allows drug companies to sell drugs to health care providers who meet certain eligibility requirements at significantly reduced prices without impacting the “best” price that drug companies are required to provide to state Medicaid programs.

The provision limited the NPE by specifying four categories of providers who are eligible. The four categories are: (1) a 340(B) entity described in the Public Health Services Act, (2) an intermediate care facility for the mentally retarded, (3) a state-owned and operated nursing facility, and (4) any other facility or entity that the Secretary determines is a safety net provider to which sales of such drugs at a nominal price would be appropriate, based on factors such as type of facility or entity, and patient population.

With these categories, Congress intended to eliminate misuse of the NPE, while still allowing appropriate health care providers to benefit from its discounted prices. Unfortunately, without further definition of the term “safety net provider,” many providers for whom the NPE was intended, such as university health services or health clinics serving low-income populations, are no longer eligible for discounted drugs from the NPE. One of the most visible examples of the negative consequences of this rule is the inability of college students and low-income women to purchase birth control from university and community health centers at reduced prices. Now that they no longer have discounted drugs available, many young women are foregoing birth control altogether for financial reasons, which will result in a rise in unplanned pregnancies in this population.

This is an unintended consequence of a well-intentioned policy, and we hope that you will consider rectifying this error by issuing a definition of “safety net provider” that will more concretely determine eligibility, and will include the many providers who were mistakenly excluded by this rule. We thank you for your consideration of this important issue, and we look forward to your response.

Sincerely,

Carolyn B. Maloney (D-NY)

Nita Lowey (D-NY)

Julia Carson (D-IN)

Rosa DeLauro (D-CT)

Jay Inslee (D-WA)

Betty McCollum (D-MN)

Jim McDermott (D-WA)

Jerrold Nadler (D-NY)

David Wu (D-OR)

Jan Schakowsky (D-IL)

Adam Smith (D-WA)

Betty Sutton (D-OH)