Wall Street Journal Examines States’, Insurers’ Efforts To Combat Rising Prescription Drug Prices

The Wall Street Journal on Sept. 11 examines several programs aimed at reducing the cost of prescription drugs. Last fall, for example, Blue Cross Blue Shield of Michigan launched a campaign that asks doctors, pharmacists and patients to prescribe and take generic drugs, rather than brand-name treatments. BCBSM officials expect the program to reduce statewide prescription drug costs by at least $50 million per year. In March, Vermont established a prescription drug formulary in the state's Medicaid program to "tame its spending on drugs." The formulary requires doctors to receive permission from the state before they can prescribe more expensive treatments, and Vermont officials said that the program had saved the state more than $1.6 million by the end of June. In 1995, British Columbia, Canada, established a system of "reference pricing" in Pharmacare, a public health program that provides prescription drug coverage for elderly, low-income and uninsured residents. Under the system, the government establishes reimbursement rates for prescription drugs based on the price of the least expensive medication in the class, and patients must pay the difference to receive more expensive treatments. The system took a "big bite" out of prescription drug costs, the Journal reports. Meanwhile, Oregon has conducted "exhaustive" research to help doctors and patients decide whether brand-name treatments provide more benefits than generic versions of the medications. The state has publicized the results of the research at open meetings, on the Internet and through advocacy groups such as AARP (Winslow et al., Wall Street Journal, 9/11).