Less-padded prescriptions

Our view: The new president and Congress have a unique opportunity to lower drug prices

November 26, 2008

As the nation's president-elect and incoming Congress mull a variety of fixes for the nation's ailing health care system, there's at least one relatively simple step that could be taken to make prescription drugs more affordable for hundreds of thousands of Marylanders.

It requires only that the federal government give states the power to enable lower and middle-income families to buy prescription drugs at the same prices paid by the Medicaid program. It wouldn't cost taxpayers a dime but would make prescription drugs 40 percent to 45 percent more affordable for participants.

Two years ago, the Bush administration turned down such a program in Maryland. It was rejected on the slimmest of technicalities - that Maryland hadn't proposed spending any nonfederal money on the program (which wasn't even true).

The rejection was more a testament to the influence of the drug companies and their expectation of lower profits if the government made greater use of its collective purchasing power.

Maryland could reapply for the waiver. But a better outcome would be for Barack Obama, as president, to endorse legislation offered by Montgomery County's Rep. Chris Van Hollen that would give all states the right to create similar discount drug plans for those living at up to 300 percent of the poverty line - about $63,000 a year for a family of four.

That translates to cheaper drugs for as many as 50 million Americans. For those who are struggling to pay for housing and food, such an opportunity could make the difference between being able to treat common medical ailments such as high blood pressure or leaving them unchecked. It would work like this: Participants would be issued a card that they could present at their neighborhood pharmacy for the discount. The pharmacist would then bill the state Medicaid program for the amount of the discount, and the state would reimburse the pharmacy.

States wouldn't have to negotiate prices. Extending Medicaid discounts is not unusual (it's already done by the federally sanctioned State Children's Health Insurance Program, for instance). Studies even suggest drug companies won't suffer much either, as increased sales offset lower profit margins.

This is one aspect of the nation's health care crisis that can be resolved affordably. And it's the kind of pragmatic, centrist approach with bipartisan support that seems to have broadening appeal in Washington these days.

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