NCPA - National Center for Policy Analysis

"As Maine Goes, So Goes The Nation" On Prescription Drug Pricing

June 4, 2001

Politicians have discovered that cheaper prescription drugs are the way to older voters' hearts -- and they are hopping on the bandwagon to keep those prices down. In fact, lawmakers in 40 state capitals this year introduced proposals aimed at curbing drug spending.

  • In creating the Maine Rx Program last year, that state created price controls -- allowing its commissioner of human services to establish maximum retail prices effective in 2003 if negotiations between the state and drug manufacturers to lower prices turn out to be less than satisfactory from the state's standpoint.
  • West Virginia has approved a plan to form a multistate purchasing pool open to consumers -- including provisions to "enact fair prescription pricing policies."
  • Maryland lawmakers have agreed to ask the federal government for permission to allow Medicare patients to buy drugs at the lower Medicaid program prices.
  • New Jersey has created a senior discount program allowing lower-income individuals to pay just 50 percent of the "reasonable" cost of a drug.

But Maine's program represents the harshest action approved thus far. And lawmakers in 27 other states are using parts of Maine's law in their own proposals. The drug industry is fighting Maine's program in the courts.

Source: Julie Appleby, "States Act to Keep Drug Prices Down," USA Today, June 4, 2001.

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