Oregon Set to Enact New Law to Control Rx Drug Costs as Christian Science Monitor Examines Other States’ Measures

Oregon Gov. John Kitzhaber will likely sign legislation on Aug. 2 in the "latest twist" in state efforts to curb "soaring" prescription drug costs, the Wall Street Journal reports. The bill will establish a panel of medical experts to study medical literature about classes of drugs to determine which treatment "is the most effective in its class" and to release the findings to the public. Under the legislation, the state will "discourage" physicians in the Oregon Health Plan, which covers 260,000 Medicaid beneficiaries and 90,000 other low-income residents, from prescribing a drug that "is more expensive but not more effective" than the treatment recommended by the panel. "We are trying to create a very public forum in which we can do drug-to-drug comparisons," Kitzhaber said. He added that the law will help control costs in the Oregon Health Plan, which will likely spend $885.3 million on prescription drugs in the two-year budget cycle that began last month -- a 61% increase from the previous budget. The state predicts that the panel will find that generic drugs "are as effective as more expensive brand-name drugs" in certain classes, which would save the state about $7 million in the second year, officials said. In addition, the Journal reports that the results of the panel study may "prove embarrassing" to drug companies "if it finds that new blockbuster drugs aren't as effective as cheaper existing ones." Jim Gardner, an Oregon lobbyist for the Pharmaceutical Research and Manufacturers of America, said that although the study "will create some heartburn for the industry," he predicts that the "newer state-of-the-art drugs will come out on top" (Gold, Wall Street Journal, 8/1).

States Have 'Mixed Success'
Meanwhile, the Christian Science Monitor reports that while Congress debates adding a prescription drug benefit under Medicare, at least 29 states have enacted laws to address "spiraling" prescription drug costs, including 12 in the past two years. Although the laws "show how badly the help is needed," many have had only "mixed success," highlighting "potential stumbling blocks" for a federal program (Savoye, Christian Science Monitor, 8/1).