Model Resolution

WHEREAS prescription medicines are vitally important to ensuring good health and quality of life for Medicaid recipients; and

WHEREAS the cost-effectiveness of pharmaceuticals contribute to improved overall health care is exemplified by a reduction in emergency room visits, in-hospital days, physician visits, unnecessary surgeries, as well as avoidance of medical complications, increased speed in recovery, improved patient compliance, and quality of life through reduced pain and suffering; and

WHEREAS the American Legislative Exchange Council has supported open access to pharmaceuticals as a cost-effective method of containing costs in the total Medicaid budget; and

WHEREAS the American Legislative Exchange Council opposes restrictive measures such as restrictive formularies and prior authorization systems; and

WHEREAS the enactment of the Omnibus Budget Reconciliation Act of 1990 (HR 5835) provides for significant cost savings to all state Medicaid programs through the mandated drug manufacturer rebated to Medicaid; and

WHEREAS, HR 5835 also allows state Medicaid programs to continue or institute prior authorization programs, in which physicians must seek and obtain approval from the state to prescribe the medicines which they believe are the most appropriate for their patients; and

WHEREAS prior authorization systems have been used in more than 20 states to deny effective therapy to the poor and disabled, creating a two-tier system of medical care; and

WHEREAS research has demonstrated that substitution resulting from restricted formularies negates any potential cost savings, and;

WHEREAS 10 states are now required under federal law to eliminate their restrictive Medicaid drug formularies; and

WHEREAS officials of several states have indicated their intent to employ the newly allowable prior authorization systems as a de facto restrictive formulary, despite the mandated manufacturer rebates; and

WHEREAS such use of prior authorization would represent a distortion of the legislative intent of the Congress of the United States, and would subvert the goal of quality care fro Medicaid patients; and

WHEREAS the American Legislative Exchange Council believes that the goal of reducing expenditures in the Medicaid drug program has been attained through adoption of the manufacturer rebate provisions of HR 5835;

NOW, THEREORE, BE IT RESOLVED that the American Legislative Exchange Council is opposed to any further attempts by state Medicaid officials to hamper access to prescription medicines; and

FURTHER, BE IT RESOLVED that the American Legislative Exchange Council urge the governors and the governors-elect of the 50 states, and the state Medicaid directors, to eliminate prior authorization systems, and preserve access to important prescription medicines for America’s indigent population.

Re-approved by the ALEC Board of Directors on January 28, 2013.

Re-approved by the ALEC Board of Directors on December 6, 2019.