LA City Hall------------------------------------- Merck's VIOXX®

The Los Angeles City Council voted 14-0 today to adopt an ordinance creating the "LA-Rx" program for the bulk purchasing of pharmaceutical products on behalf of individuals, small businesses, and (possibly) non-profit organizations in "the City of Los Angeles and the greater Los Angeles area."

In an e-mail sent to media organizations this afternoon, Samantha Waterman, Policy Deputy in the office of Los Angeles Councilmember Antonio Villaraigosa, wrote:

"LA-Rx - AV's proposal to create a prescription-drug bulk-purchasing consortium for a prescription-drug discount card was approved today (5-4-05) with no discussion and no opposition (14-0)….What passed today was the creation of a Steering Committee. The Steering Committee will draft an RFP [request for proposal] (and, in the process, make sure that the prescription drug card program is viable and won't create unreasonable liabilities for the City of Los Angeles).  The RFP will go before Council for approval before publication.  Companies such as pharmaceutical benefits managers (PBMs) will respond to the RFP (once approved by Council) and then the process of implementing this program will be on its way. See the attached for details about the program."

To access the background information sheet that was attached to the e-mail from Councilmember Villaraigosa's office, called "How LA-Rx Would Work," click here.

The LA-Rx program is an example of a "limited, modified monopsony."