The fact that Congress debated a bill on adding prescription drug coverage to Medicare for nearly a decade and passed an inadequate plan only in 2003, is commonly ascribed to the power of lobbyists representing special interests. Yet, 31 states already spending heavily on health care programs like Medicaid decided by 2004 to offer pharmacy benefits to low-income seniors. The authors seek to explain this difference by testing hypotheses about the determinants of health policy using data on the adoption, revision and generosity of state prescription drug programs from 1990 through 2001.
- The age of a state's prescription drug program, its initial generosity, and whether it has been revised influenced its rate of expansion and generosity.
- Need, capacity and public preferences influence adoption of an innovative program more than either organized interests or political parties.
- Revision is more likely in states with more organized health interests and where a higher proportion of them are pharmaceutical interests.
- Generosity of prescription drug programs is strongly influenced both by the forces of need, capacity, and public preferences and by competition among organized interests.
The authors consider in conclusion the possibility that relatively small state programs may not have mattered to large national pharmaceutical companies and that the states' responsiveness to the political popularity of drug coverage programs may have led to their adoption.