Dean Backs Multi-State Plan to Reduce Drug Costs

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Governor Howard Dean says his administration is now going ahead with a plan that could significantly reduce prescription drugs costs for many Vermonters.

VPR’s Bob Kinzel reports.

One of the key issues facing the Legislature this winter is finding ways to help slow down the rising cost of prescription drugs. The increasing cost of pharmaceuticals is one of the leading factors in the rise of overall health care expenses.

In his State of the State address, Governor Howard Dean urged lawmakers to support a plan that is modeled after a program being implemented in New York, Michigan and Florida.

The proposal calls on the major pharmaceutical companies to bid for the entire generic drug market of each state. It’s a move that Dean believes could substantially reduce the cost of these drugs because it brings competition into the marketplace:

(Dean) “That’s what’s lacking, and one of the reasons the drug prices are so expensive the drug companies essentially don’t compete on price. They compete with supposedly medical efficacy. But there isn’t that much difference in most of the medical efficacy so we need to force them to compete on price, and that’s what some of these big states are doing. We can be a piece of that.”

Vermont, Maine and New Hampshire have already joined together to form a three-state buying pool for some drugs. Dean thinks the bidding process plan is the next logical step and he is going ahead with this proposal:

(Dean) “When we get to a critical mass we will be able to negotiate with drug companies the same way that Michigan and Florida have. And the Legislature’s already okayed that. Now our problem is this we don’t have enough people in these programs in order to leverage any kind of deal with the pharmaceutical companies.

The critical mass that the governor is looking for could be provided by the states that have formed the Northeast Alliance for Prescription Drug costs.

Senate President Pro Tempore Peter Shumlin is the director of this eight state alliance. The group met in Pittsburgh on Friday to consider the governor’s plan:

(Shumlin) “It’s working in Florida. It’s working in Michigan. It should be working throughout the eight northeastern states when we are done with this Legislative session. So it’s going to take legislators that have the courage to stand up to a very, very powerful industry but this change is going to come from the states. It won’t come from Congress. In my view, they’ve taken too much money from the pharmaceutical industry to make change and I’m very hopeful we can make it here in Vermont.”

If the Northeast Alliance backs the proposal, the Vermont Legislature will be asked to give its approval to the plan.

For Vermont Public Radio, I’m Bob Kinzel in Montpelier.

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