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Reducing Prescription Drug Costs

The U.S. spent $287 billion on pharmaceutical drugs in 2007, representing 14% of all health care expenditures. Driving this expense is the pharmaceutical industry, which spends $30 billion each year on marketing, often regardless of a drug's efficacy. In fact, the drug industry spends more money marketing drugs than it spends developing new ones.

Through direct arrangements or lack of oversight, the government is complicit in these profits. A report from Congressman Henry Waxman shows that the drug industry increased its profits by more than $8 billion in the six months after the new Medicare drug benefit went into effect, which does not allow Medicare to use its vast bargaining power to negotiate lower drug prices and a better deal for taxpayers and seniors.

In contrast, states have been working since the 1990's to rein in the drug industry. In 2008, at least 540 bills and resolutions have been introduced for consideration in states across the country. This attention is partly driven by polls showing that 70% of Americans believe the drug industry puts profits ahead of people.

The Prescription Project and National Legislative Association on Prescription Drug Prices (NLARx) and Prescription Policy Choices have outlined a range of policies, from reining in abusive marketing practices to ensuring the safety of medications.

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From the Dispatch

Preventing Loss of Medicaid Drug Rebate Funds for States

Jul 01, 2010

While the new Affordable Health Care law provides a variety of funding opportunities for states, one provision in the health law that could shift billions of dollars from cash-strapped states to the federal government. Under the National Medicaid Drug Rebate Program created by the Omnibus Budget Reconciliation Act of 1990, drug manufacturers are required to enter into agreements that provide rebates for Medicaid purchased drugs, establishing a 15% minimum level of rebates. Up until now, the rebates were divided between the states and the federal government. But under the new health reform law, a significant portion of the rebates will go solely to Washington beginning this year.
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While DC Delays, States Move Forward on Health Care Reforms

Jan 28, 2010

As Congress delays moving forward on the passage of comprehensive health care reform, progressive state leaders from across the country have been demanding passage of reform as critical for families across the nation. But that doesn't mean they are waiting; state leaders are moving forward, laying the groundwork for how national changes should be implemented, and creating the momentum for other meaningful health care reforms in their states.
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Rx Reforms to Address Budget Deficits and Ensure Quality of Medications

Nov 23, 2009

As part of our Shared Multi-State Agenda, the Progressive States Network is working with legislators, advocates and leading experts to promote Rx reforms in 2010 that will reduce health care costs for consumers, businesses, and state and local governments, and will help ensure access to safe and effective medications. Through coordinated, strategic support, PSN and our allies will be working to introduce and advance Rx reforms that will help address state budget deficits and improve access to quality medications in as many states possible; providing model legislation, policy analysis, messaging and more - all of which has been gathered and will be constantly updated on our Prescription Drug Reform Shared Agenda web page.
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The Supreme Court and the States 2008-2009: Trend Defending State Authority Emerges this Term

Jul 14, 2009

Whether out of circumstance or an emerging trend, where state authority was at issue, this term the U.S. Supreme Court overwhelmingly deferred to state decision makers-- a significant reveral from last year.
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