Wednesday, May 4, 2016

Paterson in Budget Crisis Over Prescription Drugs

Pain Cream = Layoffs for Paterson
Paterson is reporting that may have to lay off over 500 staff members next year due to skyrocketing prescription drug costs.

Paterson's employee prescription drug costs will double next year to $38.8 million and Paterson cannot find an insurer who will insure that kind of cost increase.

state-appointed superintendent Donnie Evans said in his memo that the district cannot afford the “skyrocketing” increases in prescription costs and would have to make staff reductions to offset the expense.
Evans said projections put next year’s uncovered prescription drug cost at $38.8 million, which he said would amount to about 517 jobs. The district has about 4,500 employees.
“But this money is not in our budget,” Evans wrote, “and without a settlement with PEA, the District must make cuts elsewhere – which would certainly impact our ability to provide the children of Paterson with the quality education they deserve.”
At issue are compound drugs, combinations of medications created by some pharmacists to meet patients’ individual needs. Compound drugs use ingredients approved by the federal Food and Drug Administration, but are not FDA-approved themselves, officials said.
In his memo, Evans said Paterson Public Schools had $187,900 in prescription claims for compound drugs in 2012-2013. But he said that number rose to $2.8 million last year and projections are that the total cost will jump to $18.6 million for the current year.
To date, the district has been able to limit the expense of the compound drugs by having an excess insurance policy that covered those costs, officials said. But district officials said they cannot find an insurance company willing to take on the policy for next year.
As a result, all costs for compound drugs would have to be covered by the district, officials said.

According to the Paterson school district, 85% of the compound prescription costs are for pain creams.

The Paterson Education Association says that the threats to eliminate 500 jobs unless prescription coverage is changed is "blackmail."


Paterson's teachers have compromised on compound prescription drug coverage.

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