Maine Takes Stab at Controlling Drug Prices Pharmaceutical Firms Vow to Challenge Law

Article excerpt

NEW YORK -- The debate over how to control drug costs moved from the nation's capital to Maine this week when it became the first state to decide to use its bargaining power to negotiate prices of prescription medicine for people without coverage.

Tired of waiting for Congress to act, many states are closely watching Maine's bold experiment.

Maine is also threatening to become the first state to enact price controls on prescription drugs if the negotiations fail to hold down prices by 2003.

"While Maine is a small state, this is no small effort," said Stephen Schondelmeyer, professor of pharmaceutical economics at the University of Minnesota. "What this really shows is the frustration of consumers and policy-makers, and how we've not seen any effort on the pharmaceutical industry to hear our concerns."

The pharmaceutical industry is expected to challenge the law in court. Gabrielle Williams, a spokeswoman from the Pharmaceutical Research and Manufacturers of America, called it "the worst piece of legislation I've ever seen."

Maine's plan, signed into law Thursday, aims to help the 300,000 of its 1.2 million residents who lack prescription drug coverage. Many of them are Medicare recipients.

In effect, Maine will operate in a way similar to that of large pharmacy benefit managers, which are hired by big employers and health insurers to get substantial discounts from drug manufacturers by buying in bulk.

Most states already negotiate prescription drug prices for Medicaid recipients and government workers. …