For Drugmakers, The Sky's No Longer The Limit

Drug companies pay attention to Linda M. Rhodes. As head of Pennsylvania's Department of Aging, she runs a $220 million-a-year program to help the Keystone State's elderly pay for drugs--the largest such program in the U.S. So, when Rhodes called Bristol-Myers Squibb Co. Chief Executive Richard L. Gelb last fall, he listened. Rhodes chastised Gelb for threatening to stay out of her program rather than absorb the 12.5% rebate off wholesale prices that a new Pennsylvania law requires. Gelb relented and signed up before the law took effect on Jan. 1. Soon, "a few other companies that were sitting on the fence" did the same, says Rhodes.

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