Maine legislature passes price control bill

A bill establishing a "fair drug pricing board," which would set prices for pharmaceuticals in the state of Maine, passed the Maine legislature. Unlike a similar bill in Vermont, which, as of press time, had yet to be voted on in the Vermont House of Representatives, the Maine bill passed both the Senate and the House and awaits only a signature from the state's governor, Angus King.

According to the language of the bill, "Pharmaceutical companies are charging the citizens of Maine excessive prices for prescription drugs, denying Maine citizens access to medically necessary healthcare and thereby threatening their health and safety."

If the bill passes, the 11-member board will establish a price schedule of maximum manufacturer prices for prescription drugs sold in Maine by using the prices charged for prescription drugs in Canada as a yardstick. According to the bill, "The maximum manufacturer price of a prescription drug may not exceed the manufacturer price for that drug sold in Canada."

The board will also set similar restrictions on prices for wholesalers and retailers.

Pricing Board-established prices would take effect beginning October 1, 2000 unless nonregulatory price changes are implemented prior to September first of this year.

Exceptions would be made for companies that had previously entered into legally binding contracts.

"It is the intent of the legislature to implement a series of nonregulatory programs as intermediate steps designed to achieve the legislative purpose of providing affordable access to medically necessary prescription drugs for all Maine citizens."

PhRMA displeased

The Pharmaceutical Research and Manufacturers of America has denounced the bill and said that if passed, it would only serve to stifle innovation. "Anytime you set up a price review board and say, 'This is going to be the price - period,' you do not take into account the risk and uncertainty of biomedical research," said Jeff Trewhitt, spokesman for PhRMA. "For every five medicines that go into human clinical testing, only one comes out and is ultimately approved. Four out of five are discarded in human clinical testing with no return on investment. And price controls simply don't take any of that into account."

PhRMA called for an improvement in the existing Medicare program as an alternative to state price controls. Said Trewhitt, "Congress should expand drug coverage under an improved Medicare program. This is a national problem that requires a national solution." PR