1990 Annual Report
At the outset of the decade Medicaid spending was $23 billion a year By the end of the decade, Medicaid spending had reached S51 billion annually-and was heading higher MEDICAID BUDGET $ Billions 50 30 20 10 1980 1981 1982 1983 1984 1985 1986 1987 1988 Source: Health Care Financing Administration The rise in Medicaid spending helps to explain why the states have become increasingly important to the pharmaceutical industry. Medicaid now is the second largest item in most state budgets after education-accounting for about 11 percent of state spending-and Medicaid drug programs spend about $3.5 billion annually. Ten years ago, only a few pharmaceutical companies had full-fledged state government-affairs programs and now, reflecting the increased importance of the states to industry, 24 companies have such programs involving more than 150 people. Not surprisingly, PMA has concentrated on Medicaid cost problems during the past decade. The industry was able to persuade state legislators to increase Medicaid drug budgets by hundreds of millions of dollars and to prevent the enactment of restrictive formularies. Open-formulary legislation was passed in Oregon, Utah, South Carolina, Oklahoma and Louisiana. EFFECTS OF RESTRICTED FORMULARY ON MEDICAID EXPENDITURES +31% +28% 30 + 4.1% to 20 15.5% 10 PMA also successfully carried out the tortHospital Physician Total Mental Care Services Medicaid Cost reform program authorized by the Board of DirecSource: William J. Moore and Robert J. Newman, An Economic Analysis of State Medical Formularies, Department of Economics, Louisiana State Univer- tors. Since the Association launched the program sity, December 1989. in 1986, 37 states have enacted at least one of the industry's key reforms and 23 states have enacted two or more of these reforms. In addition, five states have enacted a government-standards defense, under which compliance with FDA drug-approval standards provides a defense against punitive damages in product-liability cases. International events frequently dominated the news during the 1980s: Anwar Sadat and Indira Gandhi were assassinated; an earthquake in Soviet Armenia killed 25, 000 people,; Great Britain recaptured the Falkland Islands from Argentina; the Berlin Wall was dismantled; and the eight-year Iran-Iraq war finally ended. The industry also was occupied by foreign developments during the 1980s. At the outset of the decade, countries that did not provide adequate intellectual property protection for pharmaceutical products had no incentive to do so-and would hardly even discuss the matter. The Trade and Tariff Act of 1984, which made the denial of intellectual property protection an unfair trade barrier, changed all that-and provided the basis for an aggressive PMA effort to achieve adequate patent protection abroad. 8
About this Item
- Title
- 1990 Annual Report
- Author
- Pharmaceutical Research and Manufacturers of America
- Canvas
- Page 8
- Publication
- Pharmaceutical Manufacturers Association
- 1990
- Subject terms
- reports
- Series/Folder Title
- Marketplace > Press releases, reports, and newsletters
- Item type:
- reports
Technical Details
- Collection
- Jon Cohen AIDS Research Collection
- Link to this Item
-
https://name.umdl.umich.edu/5571095.0504.028
- Link to this scan
-
https://quod.lib.umich.edu/c/cohenaids/5571095.0504.028/10
Rights and Permissions
The University of Michigan Library provides access to these materials for educational and research purposes, with permission from their copyright holder(s). If you decide to use any of these materials, you are responsible for making your own legal assessment and securing any necessary permission.
Related Links
IIIF
- Manifest
-
https://quod.lib.umich.edu/cgi/t/text/api/manifest/cohenaids:5571095.0504.028
Cite this Item
- Full citation
-
"1990 Annual Report." In the digital collection Jon Cohen AIDS Research Collection. https://name.umdl.umich.edu/5571095.0504.028. University of Michigan Library Digital Collections. Accessed June 11, 2025.