LEAD: Breaking with longtime drug industry resistance, Merck & Company said yesterday that it would offer discounted prices to state Medicaid programs for the poor.

MERCK IS OFFERING TO CUT DRUG COSTS OF MEDICAID USERS

LEAD: As the Kremlin tightened its economic squeeze on Lithuania today, the President of the rebellious republic said his government would consider a moratorium on full independence as part of a deal with Moscow.

  Lithuania Considers Delaying Full Independence

INSIDE

LEAD: The Soviet economy is in such bad shape that a ''single major event,'' like a long strike or new ethnic unrest, could cause economic chaos, Congress was told yesterday.

U.S. Report Describes Weak Soviet Economy

LEAD: President Mikhail S. Gorbachev used his special decree powers today to undercut the authority of Moscow's new insurgent government, stripping the city of local control of street demonstrations and protest rallies in the center of the capital.

  Gorbachev Strips Moscow Council Of Power to Control Street Rallies

LEAD: Two years into a real-estate slump that has left the owners of New York City cooperatives and condominiums worrying how far the value of their homes has fallen - and many apartment hunters wondering if now is the time to buy - a review of recent sales suggests that prices have sagged 5 to 10 percent across the city.

Prices of Co-ops Sag in New York About 5 to 10%

LEAD: As the author of Poor Richard's Almanack, Benjamin Franklin, advised: A penny saved is a penny earned.

From Ben Franklin, a Gift That's Worth Two Fights

LEAD: Michael R. Milken, who created the ''junk bond'' market that financed many big corporate takeovers in the 1980's, agreed yesterday to plead guilty to six criminal charges related to securities transactions and pay $600 million in fines, people who have been briefed about the decision said.

MILKEN SET TO PAY A $600 MILLION FINE IN WALL ST. FRAUD

LEAD: The student body president is black. Social life has not been marred by the kinds of ugly racial incidents that have rocked other schools. Fliers posted in campus buildings reflect a mosaic of cultures: Chinese, Puerto Rican, African-American. Yet Bernard M. Baruch College in Manhattan is in tumult these days over the question of race.

Minorities at Baruch College Charge Neglect of Ethnicity

LEAD: Two years ago two Houston police officers became frustrated with what they regarded as the gullibility and leniency of courts in dealing with drunken drivers. With their own money, the officers bought a video camera, mounted it in their patrol car and began taping every arrest for driving while drunk.

Drunken Drivers Now Facing Themselves on Video Camera

LEAD:    International    3-5       The President of Lithuania said his government would consider a moratorium on full independence as part of a deal with Moscow, which continued to tighten its economic squeeze on the rebellious republic.    Page 1       Moscow's new insurgent government had its authority undercut by President Gorbachev.

News Summary

LEAD: ''If you give in to a demand, it's actually like dealing with a terrorist group. I can kind of understand that because if we give in this time, maybe a week, a year, two years from now they'll start all over again with taking hostages. But there are so many things we don't know and will never know or understand.

Quotation of the Day

LEAD: For Estelle Ronneburg, this was a day to put reason before the dictates of a mother's heart, to seek patience with a process that has still not returned her only child, a hostage in Lebanon, after 39 months.

At Home, Hope Raised, Hope Dashed

LEAD: The Justice Department said today that it could not ''foresee any circumstances'' under which the Government would free a Mexican doctor whose arrest in the death of an American drug agent brought a Mexican threat to curtail drug-control operations with the United States.

U.S. Says It Won't Return Mexican Doctor Linked to Drug Killing

LEAD: An obituary on Tuesday about Gregory Kolovakos, director of the literature program of the New York State Council on the Arts, omitted the identity of his companion. He was Bruce Becker.

Corrections

LEAD: The Greek Government announced tonight that it had seized a truck bound for Iraq carrying parts of a large weapon.

Greece Seizes Truck Carrying Arms to Iraq

LEAD: A report in the Chronicle column on Wednesday about the Japan Prize, an award for achievement in science and technology, misidentified the winner for technology. He is Marvin Minsky, a professor at the Massachusetts Institute of Technology who is considered the father of artificial intelligence.

LEAD: The kidnappers of three Americans held hostage in Lebanon expressed frustration today with what they described as United States unwillingness to cooperate in the captives' release.

U.S. HOSTAGE MOVE ANNOYS MILITANTS

LEAD: The economy of the Soviet Union is in a ''near crisis'' state, and prospects for improvement are slight, United States intelligence agencies told Congress today.

Evolution in Europe;   U.S. SEES THREATS TO SOVIET ECONOMY

LEAD: Czechoslovakia's Parliament changed the country's name today for the second time in three weeks.

Evolution in Europe;   Also Known As . . .

LEAD: By barring the exiled King of Romania from returning over the Easter holidays, the Romanian Government had hoped to avoid conflicts in a period of explosive political volatility.

Evolution in Europe: Bucharest Journal;   Feuds and Fisticuffs, but No Once and Future King

LEAD: When Pope John Paul II journeys to Prague on Saturday, his first visit to an Eastern European country outside his native Poland, he will be greeted by a sturdy old man in red who has long been a symbol of anti-Communist resistance.

John Paul Visits a New Prague Today

LEAD: Two senior Soviet officials met with Secretary of State James A. Baker 3d today and suggested some new ideas on strategic arms, Administration officials said.

Baker and Soviets Confer on Strategic Arms

LEAD: Riots shook the black township of Rammulotsi in the Orange Free State today after five youths were shot to death by the police on Thursday.

Evolution in Europe;   Riots Hit Pretoria Township Where Police Killed 5

LEAD: In closing the energy tap on rebellious Lithuania, President Mikhail S. Gorbachev is struggling with a far larger sovereignty crisis than the one presented by the resilient Baltic republic.

Evolution in Europe: Gorbachev's Game;   The Soviets Must Make Things Hard Or Risk More Calls for Independence

Romain de Tirtoff, known by the pseudonym Erté, was a Russian-born French artist and designer. He worked in several fields, including fashion, jewellery, graphic arts, costume, set design for film, theatre, and opera, and interior decor.

April 21, 1990

Headlines from April 21, 1990

MERCK IS OFFERING TO CUT DRUG COSTS OF MEDICAID USERS

Lithuania Considers Delaying Full Independence

INSIDE

U.S. Report Describes Weak Soviet Economy

Gorbachev Strips Moscow Council Of Power to Control Street Rallies

Billboard 200

Nick Of Time

I Do Not Want What I Haven't Got

Janet Jackson's Rhythm Nation 1814

Forever Your Girl

Soul Provider

Notable Deaths

Historical Context for April 21, 1990