State Legislatures Magazine: March 2002

Editor's Note: This article appeared in the March 2002 issue of NCSL's magazine, State Legislatures. To order copies or to subscribe, contact the marketing department at (303) 364-7700.

The War on Drug--Prices

Drug Prices Greatest Increase
Taking the States to Court

California Plan Encourages Research for AIDS/HIV Vaccine

Multi-state Efforts Seek Better Rx Prices

Florida and Pfizer Forge a Deal

"Read Two Drug Ads and Call Me in the Morning"

The War on Drug-Prices

States are taking up the fight to reduce prescription drug costs.

By Garry Boulard

A new kind of drug war is being waged in legislative chambers and federal courts as citizens and lawmakers fight to lower the costs of prescription drugs.

The states are facing a Medicaid drug bill of some $25 billion this year. With a national economy in decline and congressional action on a long-promised prescription drug benefit on hold indefinitely since Sept. 11, states are feeling a new sense of urgency about the price they pay for medicines.

Maine, Florida and Michigan have taken on the pharmaceutical industry to lower the cost of prescription drugs. It's landed them in court. And the industry has vowed to fight the states on every front. It could be a long, costly and difficult fight. More states are poised to tackle the problem of rising prescription drug costs under the Medicaid program, and a battle of economic and historic significance is looming.

There are those who want to put a cap on costs. There are those who argue that the profits from drugs are ploughed back into research for even better and safer drugs. There are many nuances and sides to this issue.

"This is going to be a confrontation that the pharmaceutical industry did not see coming," observes Diane Rowland, executive director of the Kaiser Commission on Medicaid and the Uninsured. "And it is fully prepared to go to court to stop any action from the states that it views as unfair."

The first shots in the battle were fired in Maine-followed shortly by similar actions in Florida and Michigan-after lawmakers passed several bills addressing rising prescription costs, the most important of which is the "Healthy Maine" program that potentially extends Medicaid discounts on prescription drugs to more than 225,000 low- and moderate-income residents.

The "Healthy Maine" program also requires drug makers to grant Medicaid-type rebates on medicines purchased by Maine residents who have incomes less than three times the federal poverty level. While observers taking note of Maine's long history of progressive politics may have seen the "Healthy Maine" legislation as simply part of that tradition, what happened next in Florida was not as easily foreseen.

Facing spiraling drug costs that helped create a $650 million shortfall in the state's $9.7 billion Medicaid budget, lawmakers passed legislation creating a list of some 1,300 prescription drugs that will get preferential treatment from the state.

The list determines which drugs are included in the more than $1.6 billion pharmaceutical purchases Florida makes every year for its poor and disabled.

"We did it from the standpoint of being fiscally responsible," says Burt Saunders, chairman of the Senate Committee on Health, Aging and Long-term Care in Florida. "Our Medicaid budget was mushrooming and the pharmacy component of it was the largest part. It suddenly occurred to us that the pharmacy budget through Medicaid had the capacity to literally eat our overall Medicaid budget, so we thought we should do something about it," he says.

Officials say the new law could save up to $214 million a year, which is nearly 15 percent of what the state spends on Medicaid drugs.

Michigan, too, has entered the fray, developing in early December a list of lower-priced drugs that will receive preferential treatment through the state's department of community health, which administers Michigan's Medicaid program.

In response to such state actions, the pharmaceutical industry, as represented by the Pharmaceutical Research and Manufacturers Association of America-otherwise known as PhRMA-filed a series of petitions in federal court seeking to overturn state actions they claim are overreaching and could prove detrimental in the long run to the health of Medicaid patients.

PhRMA also contends that the Maine, Florida and Michigan legislation intrudes upon the relationship between physician and patient by making it either impossible or very difficult for doctors to prescribe certain drugs for patients if those drugs are expensive or not on one of the state's preferred lists.

PhRMA argues that the Maine legislation violates federal Medicaid law, which requires that federal and state governments pay for Medicaid benefits, noting that under the "Healthy Maine" program the discounts are funded entirely by the drug makers.

In response to Florida, PhRMA says the state is in violation of federal Medicaid law, partly because its list excludes drugs based only on the manufacturer's refusal to pay supplemental rebates and not because there is anything medically lacking in the drugs.

And the Michigan program, adds PhRMA, violates the separation-of-power provisions of the state's constitution because the provision did not go through the legislature, and lawmakers "were not given the opportunity to veto the policy before it took effect."

"Essentially we're fighting our battles on a series of fronts simultaneously," says Bruce Lott, director of state media for PhRMA. "Our goal is to not only defeat the actions that have taken place in Florida, Maine and Michigan, but also to discourage other states from following their lead."

Ironically the battle between the states and the nation's pharmaceutical industry began on a simple note when Maine applied for a waiver in federal Medicaid rules.

"Medicaid is a state and federal health program, but the federal government sets the rules," notes Kevin Concannon, Maine's commissioner of the Department of Human Services. "We said we would like to be able to enroll people in the Medicaid program just for the prescription drug benefits that Medicaid provides." The waiver, Maine stipulated, would apply only to those in the state who do not currently have prescription drug coverage and whose incomes are at 300 percent of the federal poverty levels or below.

Early last year, the feds approved Maine's waiver, and the state began its new "Healthy Maine" program in June. By early January, more than 108,000 people had enrolled (about 41,000 of whom have relied on a state subsidy not tied to Medicaid).

"I have never seen a program at that rate of uptake," says Concannon, who previously served as the director of Oregon's health and human services department.

DRUG PRICES GREATEST INCREASE
Overall spending on health care increased to more than $1.3 trillion in 2000, according to a January report from the federal Health and Human Services Department.

The biggest increase by far came from prescription drug costs. According to the Centers for Medicare and Medicaid Services, prescription drugs in 1999, the last year for which statistics are available, accounted for 9.4 percent of personal health care spending.

But it was the increase in that spending that was most alarming: 16 percent over the year before. The Centers also predict that spending on prescription drugs will increase by an average of at least 12 percent every year for the next decade.

PhRMA's Lott disputes that the rise in prices for prescription drugs is dramatic-"not for every drug, at least," he says, or that the profits enjoyed by the pharmaceutical industry are in anyway extraordinary. "I think this is something that has been rather overstated," he says, "particularly when you take into consideration the fact that research, which is ongoing, costs so much."

But some groups, such as Families USA, a nonprofit consumer advocacy organization based in Washington, D.C., charge that most of the expenses borne by the pharmaceutical industry are because of advertising, not research.

Studying the net profits and expenses of the nation's nine largest pharmaceuticals, Families USA issued a report last summer claiming drug companies are spending "more than twice as much on marketing, advertising and administration as they do on research and development."

However the pharmaceutical industry chooses to spend its money, contends John Leuhrs, national coordinator of health affairs and long-term care with the American Association of Retired Persons (AARP) in Washington, the fact that its products continue to cost more is "a national disaster just waiting to happen."

"And to our relief, it seems to be the states who are trying to do something about it, trying to, at least, get more tools in their hands that they can use to control prescription drug prices."

Altogether some 30 states have enacted legislation that includes subsidy programs, bulk purchasing, expanded rebates from manufacturers, as well as discount formulas for both seniors and children.

And pharmaceutical industry officials are girding for more sweeping legislation similar to Maine's and Florida's in up to a dozen other states this year.

"I think the reason that you are seeing more activity of this sort coming out of the various states-instead of Washington where most battles of this sort are usually fought out-is a simple one," says Concannon in Maine. "The pharmaceutical industry does not have as much influence in the state capitals as they do in Washington."

But it is not for lack of trying.

Lott of PhRMA says his group is not concerned with protecting the industry's profits as much as it is with the question of accessibility.

What troubles them, he says, is that the Florida, Michigan and Maine plans "in the long run, limit access for Medicaid patients. We very much think this is a serious mistake, a bad thing."

Lott contends that state efforts to categorize favored drugs with a formulary "just interfere with the doctor-patient relationship and the ability of the doctor to prescribe the medicines he thinks are most important without going through a lot of bureaucratic red tape."

TAKING THE STATES TO COURT
And while PhRMA's foes in the states may find reason to argue with Lott's position, few can deny the persistence of the group as a litigant. So far, it has filed legal challenges against the prescription drug price control measures in Maine, Florida and Michigan.

PhRMA has asked the 1st Circuit Court of Appeals in Washington, D.C., to review an earlier three-judge panel decision approving Maine's prescription drug price control law. The group also filed suit in response to Florida's effort, arguing that the law "limits Medicaid patients' access to drugs that are not on the formulary by requiring doctors to obtain special permission from the state each time they want to prescribe those drugs for a Medicaid patient."

But in early January, U.S. District Judge William Stafford in Tallahassee rejected PhRMA's petition, prompting the organization to prepare arguments for an appeal to the 11th Circuit Court of Appeals.

At the same time, an Ingham County Circuit judge in Michigan blocked that state's efforts to curb drug prices, arguing, among other points, that because the plan never got the approval of the full Legislature, the state administration had overstepped its authority.

But that tentative PhRMA victory was overturned on Jan. 17, when the Michigan Court of Appeals reversed County Circuit Judge Lawrence Glazer's earlier ruling, allowing the Michigan program to become effective on Feb. 1. Despite PhRMA's energetic opposition, those who favor doing something about the rising costs of prescription drugs under Medicaid think it is not realistic to expect the pharmaceutical industry to fight multiple battles if more states do indeed follow the example of Florida, Maine and Michigan. And even Ott admits that his organization can only do so much. "We've never before been involved with this many lawsuits all at once."

But even if the industry-as expected-continues its many-faceted opposition, proponents say that should not deter states from trying to lower costs anyway.

"No one said it is going to be an easy thing to do," says Michael Saxl, speaker of the Maine House and prominent supporter of the Healthy Maine program. "You have to be willing to try a lot of different things. You have to be willing to take risks and believe in what you are doing."

Jon B. Rawlson, vice president for government affairs with PharMerica in Tampa, which provides pharmacy services to nursing home patients, is similarly optimistic. "I really do think that this is something the states can tackle," says Rawlson, who has been tracking both enacted as well as proposed legislation. "But they have to do it in a way that is inclusive, bringing in the pharmaceutical industry to work out a solution, rather than approaching it as some sort of a battle or confrontation."

He says that PharMerica was brought into the Florida debate early by providing the state with data on not only which drugs the nursing home patients most commonly use, but also the drugs that clinical pharmacists-who, he says, "are always looking for the most therapeutical equivalent drug that is also lower-priced"-recommend.

"The Florida approach was one of trying to get as much information first as possible," continues Rawlson. "The fact that they also allow for a physician to override the preferred list if he or she feels a higher-priced drug is necessary, really impressed us."

Connecticut Senator Catherine Cook, whose eastern district is populated by a number of pharmaceutical companies including Pfizer, also worries that an "anti-pharmaceutical industry" atmosphere may be developing at the state level, making it difficult for the drug companies to get a fair hearing.

"Are drugs taking a bigger percentage of our health dollar now than twenty years ago?" asks Cook. "The answer is yes. But that's the good news, a sign of how many new drugs have been developed to help us live with the chronic diseases that used to kill us."

She predicts that if the states do not include the concerns of the drug companies in their approaches to lowering drug prices, "they may very well fail."

"It's illegal for any state to do a formulary under Medicaid. Washington has made that clear," says Cook. "But I don't have a problem with a preferred list, as long as doctors can override anything on that list."

"That is what Florida has done," she continues, "and I think if the other states follow that, they'll be in good shape." Cook similarly warns that not in every case are the lower cost generic drugs preferable to the higher cost name brands.

"It could come down to a brand name drug produced by the latest technology that has fewer side effects and better targets the medical problem in question versus a generic drug that was developed 17 years ago and doesn't," she remarks.

With so many nuanced concerns in the debate over Medicaid prescription drugs and how to cope with their rising prices, legislators may wonder why they should want to even tackle the issue in the first place.

Maine Speaker Saxl warns that any even-handed approach is necessarily going to be difficult. "It is an enormously complex issue, the kind of issue that, when you first begin to look into it, is extremely overwhelming."

But, Saxl adds, such challenges should not deter lawmakers from trying. "By the end of the day, we need to make certain that people get the access to health care that they need. And that can only come with affordable prescription drugs."

Garry Boulard, a frequent contributor to State Legislatures, is a free-lance writer in New Orleans.

California Plan Encourages Research for AIDS/HIV Vaccine

California Senator John Vasconcellos is a man on a mission. His goal: Create a powerful financial incentive that will encourage corporate investment in a vaccine that protects against AIDS and the human immunodeficiency virus (HIV), the agent that causes the disease.

Last year, Vasconcellos-who's serving his second term in the Senate after 30 years in the Assembly-shepherded through a bill that requires all health maintenance organizations doing business in the state, including CalPERS, a public employee health plan with 1.1 million members, to purchase an AIDS vaccine as soon as it is available and fully approved by the federal Food and Drug Administration. The law, which took effect Jan. 1, is intended to guarantee buyers for a vaccine in California, which is the largest single state health insurance market, and spur venture capital firms to invest more intensely in the development effort.

Many people in the field of AIDS medicine and research feel the financial incentives for drug manufacturers today are weighted "much more toward palliative than preventive interventions," said Vasconcellos, a Democrat from San Jose. With more than 50 million people already infected with HIV or dead of AIDS worldwide and millions more lives at stake, "we are looking to inject more balance" into the R&D equation, he explained.

The inspiration for the legislation, Vasconellos said, was an old friend, Marcus Conant, a physician who in 1981 documented the first cases of Kaposi's sarcoma-a rare skin cancer that manifests in HIV infection. Conant later helped develop San Francisco General Hospital's AIDS Program and what's now known as the San Francisco AIDS Foundation. His Conant Foundation, an education and treatment organization founded in 1990, has also led to establishment of the International AIDS Vaccine Initiative; with a gift of $25 million from the Bill and Melinda Gates Foundation, the initiative is pressing for development of an effective vaccine.

The two men met in the early 1980s, when the AIDS epidemic was emerging. Then Speaker (now San Francisco Mayor) Willie Brown had asked Vasconcellos to begin devising legislation to address a problem taking its immediate toll on the state's sizeable gay male community. Because of his experience in treating the disease the doctor was a logical source to mine. Conant is a key character in And the Band Played On, Randy Shilts' influential 1987 book on early government and medical responses to AIDS. In the course of their talks, Vasconcellos and Conant discovered they share a birthday and since have met for dinner twice a year to catch up on the issues and swap ideas.

One of the first concrete proposals to come out of their talks was a Vasconcellos-sponsored law, enacted in 1986. It provided financial incentives for AIDS-related research and modified liability laws in order, as he put it, "to give developers some leeway" in their work by offering them greater protection from litigation.

But the years have passed, and "there's still nothing to stop this disease, nothing to slow it down," Conant said in an interview. Globally, according to the Joint United Nations Programme on HIV/AIDS, an estimated 21.8 million people have died of AIDS since the epidemic began. Today, 36.1 million people are living with HIV/AIDS. In the United States, the cumulative number of deaths due to AIDS stands at just over 448,000. In early January, the Centers for Disease Control and Prevention reported some troubling news: New AIDS cases in the United States rose by 8 percent last year from 38,864 in 2000 to 42,008 "after seven years of steady decline."

While some drug companies are taking the search for a vaccine seriously, "the issue is what kind of an investment is really necessary," Conant said. As a physician who has seen the toll of AIDS firsthand, he believes "we need an all-out push to develop a vaccine." All the new law does, he continued, is to assure potential developers that if they succeed "the money to pay for it will be there."

Bruce Lott, director of state media relations with Pharmaceutical Research and Manufacturers of America (PhRMA), rejected the implicit premise: Companies are devoting more time and money to treatment because they can make much greater profits on drugs that people must take day in, day out, over their lifetimes than on one that prevents the disease in the first place. R&D teams are investing in the search for "preventatives, treatments and cures and will continue to do so," he said.

A PhRMA survey of new medicines in development in 2001 found a total of 14 HIV/AIDS vaccines in the pipeline. Developers include the National Cancer Institute and 10 private sector firms, from giants like GlaxoSmithKline and Merck to lesser knowns like CEL-SCI and Therion Biologics. Still, Lott said, the outcome that Vasconcellos seeks-assuring that patients have access to a vaccine by making coverage of it mandatory-is "very positive."

In addition to Conant's contribution, Vasconcellos credits his Republican colleague, Senator Jim Battin, with building bipartisan support for the bill. (It passed by votes of 30-6 in the Senate and 56-17 in the Assembly.) When first introduced, the legislation applied only to CalPERS. Battin recognized that it could save the state upwards of $20 million a year in the cost of drugs for AIDS patients and amended it to apply to commercial plans, as well. By Vasconcellos' calculations, the state will pay less than $1,000 per dose for the vaccine. By way of contrast, the Office of AIDS in the state Department of Health Services puts the cost of one patient's supply of drugs at $10,000 to $20,000 a year. And the way the law is constructed, he said, "you don't spend any money until you've got the savings in the bank."

Now, the senator is launching a campaign designed to get the other 49 states to follow California's lead. In a letter mailed in January to the leadership of both parties as well as the chairs and vice chairs of health committees in both chambers, Vasconsellos and Battin invited their counterparts to join in an effort to develop "a coordinated, guaranteed market truly conducive to stimulating the investment of needed dollars for research and development of a vaccine." As Vasconcellos put it: "We want to build a national movement" that may eventually stop AIDS in its tracks.

-Linda Demkovich, NCSL

For more information on the California law or Vasconcellos' national campaign, go to http://www.senate.ca.gov or call Oanh Ho at (916) 445-9740.

Multi-state Efforts Seek Better Rx Prices

If we buy 10 million instead of one million, can we get a much better price?" This age-old practical business question is at the core of several growing movements by states to obtain the best deals for costly pharmaceuticals.

While lawsuits challenging price control and prior authorization strategies are grabbing headlines in several locales, efforts to use bulk-purchasing and multistate purchasing coalitions have spread rapidly, but more quietly, in the past 12 months. Traditionally in most states, each agency or department paid separately for medical services, including prescription drugs. Each state runs independent Medicaid programs, and the current 26 states with senior subsidy programs have had no connection across state lines.

But that is changing. Rather than go it alone, a growing number of states have begun banding together in the hope of strengthening their bargaining clout. Participating states expect to not only save on drug prices, but also on billing and utilization review costs and other administrative expenses. Three formal regional groups and one exploratory association have formed as of January.

The earliest legislator meetings in Montpelier and Boston evolved into the Northeast Legislative Association on Prescription Drug Prices (Connecticut, Maine, Massachusetts, New Hampshire, New York, Pennsylvania, Rhode Island and Vermont). Members last July endorsed the concept of a joint purchasing coalition with a joint contract for pharmacy benefit management.

"At first I said we will need legislation from all eight states to act," says Cheryl Rivers, who resigned from the Vermont Senate to serve as the association's executive director. "Now, I'm not convinced that's necessary if we work together and in cooperation with the executive branch." Meanwhile, their meetings serve as a clearinghouse for reports on new pharmaceutical legislation and programs. Legislators from additional states are welcomed regularly.

A separate initiative, the Northern New England Tri-State Coalition, united Medicaid and agency leaders in Maine, New Hampshire and Vermont. They have agreed on a single pharmacy benefits manager, First Health Services Corp of Virginia, and intend to launch some services early in 2002.
The Pharmacy Working Group began in the Southeast last March. The initial meeting in Georgia included 15 states. By November seven states (Louisiana, Maryland, Mississippi, Missouri, New Mexico, South Carolina and West Virginia) were seeking a multistate bid to serve an estimated 1.4 million public employees and their families. The seven states pay out an estimated $853 million for employee pharmaceutical claims. In developing specifications for the multistate bid, the group concentrated on how to increase rebates from drug companies and how to reduce the traditionally hefty fees charged by benefit management companies.

Western officials representing Idaho, Montana, Nevada, Oregon, Utah, Washington and Wyoming have had discussions. Both chambers in Idaho and the Washington Senate passed resolutions in 2001 favoring joint pharmaceutical purchasing. Senator Charles Scott of Wyoming said there also is "considerable interest" in a strategy being developed in Oregon and British Columbia, which calls for reference drug pricing (the least costly of equally effective drugs becomes a state's payment standard).
A few states intend to save by combining buys within their borders. A 2001 Texas law creates the Interagency Council on Pharmaceuticals Bulk Purchasing, including the departments of health and mental health, state employees, retirees, teachers, the prison system, and "any other agency that purchases pharmaceuticals." For the first time, the law also requires manufacturer and wholesaler price reporting. John Keel, the Legislature's budget board director, estimated two-year savings of $13,200,000. Georgia just started a similar plan for combining in-state purchasing. Massachusetts legislators hope to implement a 1999 law that would include agencies plus the Medicare population and anyone uninsured or underinsured.
A national survey of legislative health leaders, conducted by NCSL's Health Policy Tracking Service, showed 32 states predicted that purchasing pools for prescriptions are likely to be considered in 2002.

Senator Peter Shumlin, chair of the Northeast Association, noted his group seeks a free-market approach with bipartisan support. "We are simply coming together to get a fair price. We don't want our citizens to have to use their passports to get access to a fair price for prescription drugs."

-Richard Cauchi, NCSL

Florida and Pfizer Forge a Deal

Pfizer's products remain on Florida's list of preferred drugs because of a deal cut last spring by the world's largest drug company's chairman and CEO Henry McKinnell and Governor Jeb Bush.

Lengthy discussions took place as state lawmakers were deciding which drugs should be on Florida's preferred list. The deal that McKinnell and Governor Bush finally agreed upon was both simple and revolutionary: In exchange for being allowed to keep all of its drugs on the list, Pfizer agreed to take over the day-to-day supervision of up to 12,000 chronically ill patients currently in the state's Medicaid program.

Through what the company calls "technology-based disease management," some 60 specially trained nurses will work with Medicaid patients and help them develop better diets and exercise programs while also promoting a drug education program designed to eliminate medications that are duplicative or cancel each other out.

Pfizer promised Florida that it could save the state up to $33 million in health care costs, much of it through fewer emergency room visits.

"A key public health priority must be to deliver modern medicines to those most in need in a cost-effective manner," McKinnell announced after the agreement with Bush was inked last summer, adding that the Pfizer/Florida approach exemplifies a "creative and innovative private/public partnership program."

Princeton University health care economist Uwe Reinhardt called it "as innovative as anything I've seen a drug company do." He added that Pfizer's promise to reduce costs for Florida through disease management "puts its reputation on the line" by making the company accountable for the results.

By remaining on the preferred list, the company stands to reap tens of millions in profits-certainly more, even Florida state officials admit-than the $33 million Pfizer promises it will save Florida over the next two years.

Governor Bush has said he is willing to work with any drug company that can present an innovative proposal. So far, Bristol-Myers Squibb has stepped up to the plate, agreeing in September to provide disease management for acutely ill Hispanic and African American patients in five Florida counties, including Miami-Dade.

As with Pfizer, Florida will keep all of Bristol-Myers' 54 drugs on the state's preferred list. Bristol-Myers, meanwhile, promised to save the state $16 million in Medicaid costs by the summer of 2003.

Although health care officials say the savings from disease management remains untested, both Pfizer and Bristol-Myers have agreed that if their programs fail to achieve the savings promised, they will pay cash to Florida to make up the difference.

Pfizer recently crafted another plan that has generated goodwill for the company. In January the company said it would offer drugs to low-income elderly people for a flat fee of $15 a month for each prescription, a fraction of the average retail price of $65. This will help some 7 million people nationwide with gross incomes under $18,000 a year and couples with incomes below $24,000. The company says the measure is intended as a stopgap until Congress adopts broader Medicare reform. Medicare does not cover the cost of prescription drugs outside hospitals.

GlaxoSmithKline and Novartis AG also have discount programs for low-income elderly people.

-Garry Boulard

"Read Two Drug Ads and Call Me in the Morning"

With pressure to try and curb the increased costs of prescription medicine, lawmakers are taking a closer look at the implications of pricey advertisements for state-funded programs.

At an estimated annual cost of $2.5 billion, pharmaceutical advertising on television and in the popular press has indeed made drug companies and their brand products household names.

A new analysis provided by the managed care industry reports that from 1999 to 2000, prescriptions written for the top 50 most heavily advertised drugs rose 24.6 percent, compared with 4.3 percent for all other drugs combined. Drug manufacturing is a $122 billion industry, so a small increase in market share can reflect a multimillion dollar boost for any particular company.

Legislative lawyers point out that it is nearly impossible for individual states to control national advertisements, now regulated by the Food and Drug Administration. But this has not prevented some states from seeking solutions.

Twelve states considered bills regarding direct-to-consumer advertising in 2001, and at least one-West Virginia-enacted a law that gives the director of the West Virginia Public Employees Insurance Agency, Tom Susman, discretion to use "innovative strategies" such as requiring prescription drug manufacturers to show how much they're spending on advertising and what that adds to drug costs.

However, Susman believes that West Virginia will probably train a team of pharmacists to meet with and educate doctors about the fiscal effect of prescribing higher priced and advertised drugs. "The pharmaceutical industry [representatives] don't talk about costs," Susman said. "We go in and educate [doctors] about less expensive and therapeutic equivalent drugs, and then they can make decisions to use less costly generics." Susman added that physicians who participate in Medicaid have an incentive to prescribe less costly drugs, "With only so much money to go around and using less expensive drugs, we have more money to put into paying the West Virginia physicians."

Several states-such as Florida, Michigan, Oregon and Vermont-are creating drug lists for Medicaid patients that emphasize cheaper generic products over the popular advertised pharmaceuticals.

For information: www.ncsl.org/programs/health/rxads.htm

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