Restoring Pill discounts would be easier than you might think

A wording glitch led to increased contraception costs for college students and the working poor. But so far, the federal government hasn't shown much interest in fixing the mistake.


Catherine Price
November 27, 2007 9:29PM (UTC)

Back on Nov. 12, we wrote about a wording glitch in the 2005 Deficit Reduction Act that disqualifies many university clinics and family planning clinics (that treat the working poor) from receiving "charitable" discounts on contraceptives from drug companies. The result has been such a steep increase in price that some clinics have stopped offering the contraceptives altogether.

A reader alerted us to this editorial from the Los Angeles Times pointing out that this mistake could be easily fixed by Secretary of Health and Human Services Michael Leavitt by "defining these clinics as part of the medical 'safety net' entitled to discount prices." But, as the editorial points out, so far he has declined to do so. Instead, Rep. Joseph Crowley, D-N.Y., has introduced a bill to bring back the discounts -- which, if successful, is sure to take a much longer time to come into effect.

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For anyone still left wondering how this discount rollback came to be, I thought the Times' editorial provided a good explanation:

"The Deficit Reduction Act of 2005 sought, sanely enough, to curb aggressive marketing by pharmaceutical companies. The drug manufacturers were gaining customers by offering steep discounts of their products to hospitals and other healthcare providers, and at the same time treating those as charitable sales. Known as 'nominal pricing,' the charity sales enable companies to pay less in rebates on Medicaid drugs.

"But the act, which was implemented this year, used such broad wording that it also precluded legitimate charitable sales to university clinics and many family-planning clinics that treat the uninsured working poor. Prices of the drugs have as much as quintupled, and some clinics have stopped offering them altogether."

Now, whenever you bring up the subject of access to discounted contraceptives (especially when some of the recipients are Starbucks-drinking, iPhone-wielding college students), people get in a tizzy about why we as a society should be subsidizing what some consider to be a responsibility that comes with having sex. It's a legitimate conversation, and it's true that at the bottom line taxpayers are helping subsidize these discounts (since the rebates come through Medicaid, which is paid for by taxpayers). But as has been pointed out many times before, continuing to provide discounts for contraception for student clinics and clinics for the working poor would not be an additional cost to taxpayers -- and could actually save money down the line by helping to prevent unintended pregnancies for which taxpayers pay the bills. What's more, we've already spent about $1 billion on abstinence-only education in the past decade -- wouldn't it make practical sense to provide some backup for college students and poor, uninsured adults who want to have responsible sex?

The editorial ends with the assertion that the federal government wouldn't be so reluctant to make a wording fix if it "had been about providing, say, insulin to the people least able to avoid it." That's a sort of stupid comparison (if you don't have insulin you die). But the point still stands that this seems less about what's practical and more about what the editorial suggests might be "an underlying reluctance about making contraceptives affordable to young college women, many of whom are single."


Catherine Price

Catherine Price is an award-winning journalist and author of Vitamania: How Vitamins Revolutionized the Way We Think About Food. Her written and multimedia work has appeared in publications including The Best American Science Writing, The New York Times, Popular Science, O: The Oprah Magazine, the Los Angeles Times, The San Francisco Chronicle, The Washington Post Magazine, Salon, Slate, Men’s Journal, Mother Jones, PARADE, Health Magazine, and Outside. Price lives in Philadelphia.

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