There can be multiple approach - 

Assuming you are using Pega 7

1. One option is obviously to use RD with remove duplicate rows. However here you need to create seperate rules and as # of rules increases, system becomes more complex to mainatin

2. Use a Parametric data page. The data page will call parametric SQL-Connect rule to execute a query. In the UI, for a field where you need a dropdown of distinct values - refer the datapage and pass the Field name as parameter (Say "City" for populating city dropdoen).The data page will pass this parameter value to the SQL-Connect rule. Write the sql-connect in such a way, that it can accept the parameter and build appropriate query (select distinct {param.valuetofetch}....).. This way everytime the data page (say you named it as D_MyListOfValues) is called for differnet fileds, it will strating building up the page like below. 

D_MyListOfValues[City]

       pxResults(1).Value=NewYork

       pxResults(2).Value=London

D_MyListOfValues[State]

       pxResults(1).Value=NewYork

       pxResults(2).Value=NewJersey

You might decide whether to make the Data page as node level or requestor/thread level depending how frequently you data is going to change. The benefit is that you use leaas number of rules, you can take benefit of data page caching for better performance, and the solution is expandable for other dropdowns - code once use for any dropdown.

Note - The above explanation is high level abstraction of actual solution. Consult Pega help for actual code syntax.