Stateline Story

Rx Experts Discuss Rising Costs

What's breaking state Medicaid budgets? Ask a prescription drug industry representative, a consumer advocate, a federal prosecutor and a lawyer who's argued cases for drug companies, and you'll get sharply differing answers.

Wayne Pines, a consultant to the Pharmaceutical Research and Manufacturers of America (PhRMA), Sidney Wolfe, president of the Health Research Group at Public Citizen, Assistant U.S. Attorney Jim Sheehan of Philadelphia and Paul Kalb, a partner in the Washington, D.C. office of Sidley, Austin, Brown & Wood shared their views on rising drug costs at a recent national health care reporters' meeting in Bethesda, Maryland.

Pines said state expenditures on drugs are rising because more drugs are being prescribed. "What's also going up are doctors' costs and hospitals costs," he said.

Consumer advocate Sidney Wolfe said price controls are the only way to combat rising prices. "Every developed country has (price controls). We'll have them, we just don't know when," he said.

Sheehan, who has been tracking health care fraud for 20 years, says drug companies' gift-giving practices to physicians influence what they prescribe, contributing to rising costs of prescription drugs.

"Will I prosecute people for free beer and pool? No. But the bigger issue is free trips to Puerto Ricowhich is an appealing (enticement) to doctors in the Northeastand $1,000 honorariums," Sheehan said.

Kalb says litigation is not the way to achieve policy goals. "Prosecutors should act reasonably. The only other (out) is a legislative solution where the playing field is leveled (price-wise) and disincentives are taken away," he says.