U.S. Activists, Health Officials Unlikely to Push for Large Drug Discounts in America

Insurance companies, state health officials and AIDS advocates agree that "[u]sing Africa's AIDS epidemic as leverage" to bring down the cost of AIDS drugs in the United States "could discourage drug manufacturers from further humanitarian initiatives" in developing countries, the Wall Street Journal reports. Some activists feel that pressing for cheaper drugs might discourage drug firms from offering additional discounts in Africa or the United States. Ronald Johnson, associate director of the New York-based Gay Men's Health Crisis, said, "Many of us don't want to create a situation where the drug companies weasel out of their responsibility in the developing world by saying, 'Oh there's going to be lots of pressure in the United States and we'll lose money.'" Martin Delaney, a founding director of the San Francisco-based advocacy group Project Inform, added, "We're happy to fight for lower prices, but not based on what's happening in international markets. If we pay back the industry for doing the right thing in developing nations by demanding reductions (in the United States) we're going to kill the goose that lays the golden egg." The pharmaceutical industry agreed that drug firms have no plans to offer global price cuts for AIDS drugs. Jeff Trewhitt, a spokesperson for the Pharmaceutical Research and Manufacturers of America, said, "If we were to dramatically lower prices like [ Merck and Bristol-Myers Squibb have in Africa] throughout the world, it would be extremely difficult to generate the money needed for research and development."

Little Bargaining Power for States
Under federal law, states have "little flexibility" in negotiating cheaper drug prices. In addition, states are prohibited from restricting access to FDA-approved drugs on the grounds that they are too expensive. However, states will not likely save a bundle by pressing for large discounts, the Journal reports. States already receive discounts on AIDS drugs through the Medicaid program, and the expenditures on these medicines are "dwarfed" by the spending on other treatments, such as mental illness, the Journal reports. But state health officials say they "wouldn't mind" if drug firms decided to give them "better deals" on the medicines and have been working with AIDS activists to net discounts on the medicines. States with large HIV-positive populations, such as New York, are especially interested in obtaining price cuts. Kristine Smith, a spokesperson for the New York Department of Health, said, "New York state doesn't expect to get the same treatment as Africa -- that's humanitarian relief. However, given the enormous amount of HIV drugs we buy, we think (drug companies) should be giving us bigger discounts" (Gavin/Caffrey, Wall Street Journal, 3/23).