States Move Ahead of Congress on Rx Drug Fix

Published June 1, 2001

While Congress debates and discusses, the nation’s 50 laboratories of democracy are pushing ahead with their own plans to address the issue of affordable access to prescription drugs.

The states’ aggressive approach is worrying drug makers and pharmacists, who say a consistent, national solution is what’s needed. Even many senior citizens’ advocates are having second thoughts, saying the state initiatives are too modest or politically motivated.

In a news story developed by The Associated Press and distributed by, Jeff Trewhitt, spokesman for the Pharmaceutical Research and Manufacturers of America, said, “The last thing we need is a growing patchwork quilt of differing and perhaps even conflicting state laws. It really is a national problem that requires a national solution.”

Dr. Merrill Matthews Jr., visiting scholar with the Institute for Policy Innovation, agrees. “State legislators have jumped on the prescription drug bandwagon because it is politically popular to do so,” he explains. “But the truth is, apart from setting up assistance programs that help low-income seniors, there are very few positive things the states can do, and an awful lot they can do to make matters worse.”

Hot Topic at the State Level

According to the National Conference of State Legislatures, 43 states are currently considering plans to provide discounts, bulk purchasing, or pharmaceutical price regulation. Twenty-six states already have in place some form of pharmaceutical assistance program.

  • In Virginia, a bill would direct the state health department to advertise free drug programs and create hot lines to connect people directly with pharmaceutical companies.
  • In Maryland, House and Senate leaders say they will have a pharmacy assistance program in place this month to provide immediate help for senior citizens.
  • In Minnesota, the Senate health committee has passed a bill that will enable up to one million Minnesotans without prescription drug coverage to pay about 15 percent less for pharmaceutical drugs.
  • House Republicans in North Carolina are promoting a plan to provide prescription drug assistance to seniors who don’t qualify for full Medicaid benefits.

Most of the state-level bills currently being debated would encourage pharmacies to join a privately managed program that would negotiate group discounts on prescriptions for senior citizens. The discounts would vary according to the price of the drug. The discounts would mean less money for participating pharmacies, but the resulting lower drug prices would help those pharmacies compete for senior citizens’ business.

Opponents say the bills are too limited and would represent an economic hardship for pharmacists, whose profit margins are much narrower than those enjoyed by drug manufacturers.

President Bush’s proposed FY 2002 budget, passed by the U.S. House in March, sets aside Medicare’s projected 10-year, $393 billion surplus for some future overhaul. That includes $153 billion for prescription drug benefits. Republicans rejected a Democrat alternative that would have doubled prescription drug spending by reducing the President’s proposed tax cut.

Spending on health in the U.S. totaled a record $1.2 trillion in 2000. Prescription drugs account for nearly 10 percent of that figure, and they are expected to take an even larger share of what Americans pay to get or stay healthy in the future.