CPA News Releases, Advisories, and Editorials

Cipro Pricing Debate Reveals What States Knew All Along

Washington, D.C.ﾗThe action taken by the U.S. Department of Health and Human Services to negotiate lower prices for the anti-anthrax drug Cipro (at 94 cents), while government hospitals and clinics receive a lower price (43 cents, the “340B” price), reveals the long held practice of drug manufacturers selling the exact same pharmaceuticals to different purchasers, including the federal government, at widely varying prices, as revealed in today’s Washington Post.

The Center for Policy Alternatives (CPA) has been working with dozens of states to obtain greater discounts directly from drug companies. The latest model advocated by states allows them to negotiate lower Medicaid drug prices, as California and Florida currently do, in addition to negotiating prices for the uninsured, who are charged the highest price for their medicine. (In the example of Cipro, an uninsured resident would pay $4-5 per pill for this drug, were the government not negotiating better prices.)

“The states are way ahead of the federal government on this one,” states Bernie Horn, Policy Director of CPA. “It’s outrageous that uninsured Americans pay the highest drug prices of all. It’s even more illogical, at a time when drugs costs are busting state Medicaid budgets, that states aren’t getting the best negotiated price.” The Fair Market Drug Pricing Act would allow states to negotiate lower prices for Medicaid (starting the negotiation at the 340B price), saving the states at least 17% on their drug costs. “This is a win-win situation, states can use their market power to lower costs and drug manufacturers can still make a healthy profit on all of these differing prices,” continues Horn.

“In investigating this matter in New Mexico, we have found a tiered pricing system that works to the disadvantage of seniors and ordinary citizens who do not have coverage for life saving medications. We are distressed that the pharmaceutical industry has acted to prevent the sunshining in on the true costs of prescription drugs” stresses New Mexico Senator Dede Feldman. New Mexico held an interim Health and Human Services hearing yesterday about fair prescription drug prices. Feldman will introduce the Fair Market Drug Pricing Act in 2002 to leverage the state’s purchasing power to lower drug costs. New Mexico is one of 27 states that took steps in 2001 to lower drug costs.

A briefing paper on the Fair Market Drug Pricing Act can be found at http://www.stateaction.org/issues/
healthcare/prescription/factsheet.pdf. For more information, contact Kristina Wilfore, Communications Director of CPA at (202) 956-5141.

The Center for Policy Alternatives is the nation’s leading progressive public policy and leadership development center, serving state legislators, state policy organizations, and state grassroots leaders.

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