Rx DRUG COSTS: SmithKline Beecham Skirts New Maine Law
Fighting against revolutionary drug pricing efforts, SmithKline Beecham announced yesterday that it will no longer ship its drugs to wholesalers in Maine, the New York Times reports. Maine was the first state in the country to "threaten the pharmaceutical industry with price controls on prescription drugs" in May, when officials created Maine Rx, a program to negotiate lower drug prices for many of its citizens, and resolved to institute price controls in 2003 if drug prices remain high. The new law also established $100,000 "profiteering" penalties for manufacturers or distributors found guilty of overcharging or restricting drug supplies. Pharmaceutical industry trade groups warned that Maine's law could "chill research efforts, discourage the state's fledgling biotechnology industry and hinder Mainers' access to drugs." Many lawmakers and activists in the state see SmithKline Beecham's move as a follow-up to those threats, but Thomas Johnson, a spokesperson for SmithKline Beecham, said that the company already serves the state through numerous out-of-state wholesalers. Johnson claims the shift will not affect the availability or price of SmithKline Beecham drugs -- which include the popular antibiotic Augmentin and diabetes drug Avandia. However, Kevin Concannon, Maine's commissioner of human services, said the move could raise prices through increased shipping costs. Concannon said, "On behalf of the people of Maine, I am angered at [yesterday's] actions by SmithKline Beecham because it looks like a purposeful attempt to avoid Maine law, and I intend to put into place all the elements necessary to achieve lower prices for Maine people." Johnson countered that the shift is a "business decision driven by the fact that this was a vague law and difficult to interpret." He added, "Our intent is really not to punish anyone. We're just taking measures to make sure our products remain available as always while we have a chance to understand the implications of the law."
Punishing Yankee Ingenuity?
Although Maine was the first state to take action against drug companies, its New England neighbors have been contemplating big changes all year. Lawmakers from northeastern states have been "meeting regularly to plot strategies on banding together" to lower drug costs. One popular idea is to create a regional drug buying pool (Goldberg, 8/4). On the federal level, Sen. Jim Jeffords (R-Vt.) and Rep. Bernie Sanders (I-Vt.) have championed a controversial bill that would allow drugs to be imported from other countries such as Canada. The effort drew immediate fire from the pharmaceutical industry, which has been lobbying furiously against the effort, taking out full-page ads in major papers (American Health Line, 7/20). After months of threats tossed back and forth between lawmakers and drug makers, SmithKline Beecham's action is the first "concrete response from a drug company" to an actual law. Chellie Pingree, Democratic majority leader of the Maine Senate, said, "Many threats were made by the pharmaceutical industry as the Legislature deliberated on this issue, and now the citizens of Maine will see the results of a business putting profits before the health and welfare of our citizens" (New York Times, 8/4).