Hawaii, Maryland Might Join Multistate Prescription Drug Purchasing Pool
Hawaii has already applied and Maryland is expected to apply for membership to a multistate pool for purchasing prescription drugs recently approved by the federal government, the Baltimore Sun reports (Zaneski, Baltimore Sun, 4/25). HHS Secretary Tommy Thompson on Thursday approved the plan by Michigan, Vermont, New Hampshire, Nevada and Alaska to form a purchasing pool and seek deeper discounts on prescription drugs for more than 900,000 Medicaid recipients, which is expected to save them a total of more than $12 million in 2004. The states will use the same pharmacy benefit manager, First Health Services, to negotiate prices. According to federal health officials, each state will maintain a list of preferred drugs that is supervised by local physicians and pharmacists. CMS Administrator Mark McClellan said in a conference call Thursday that "[e]ach state in the pool has its own preferred drug list, but there are enough overlaps to provide greater purchasing power." Michigan and Vermont officials first introduced the proposal in February 2003. A legal challenge against the program was filed by the Pharmaceutical Research and Manufacturers of America, which said that aspects of the program violated federal law because the states would create lists of 'preferred drugs' from which doctors could prescribe medications for their Medicaid patients. The U.S. Court of Appeals for the District of Columbia upheld a lower court ruling rejecting that argument. According to previous reports, CMS had informed Michigan officials in February that it would reject the purchasing pool because it violated federal procurement procedures. However, in a conference call Thursday, Federal Medicaid Director Dennis Smith said that earlier problems have now been resolved. Federal officials did not say whether they would limit the number of states participating in the pool (California Healthline, 4/23).
Lillian Koller, director of the Hawaii Department of Human Services, said that other states' officials "can mimic the applications" that were approved on Thursday and that states could begin to purchase drugs together by September. Hawaiian officials estimate the state could save $9 million annually on lower-cost drugs and from rebates offered by drug manufacturers that want to be included in Hawaii's preferred drug list, Koller said (Nakaso, Honolulu Advertiser, 4/23). Joseph Davis, executive director of the Maryland Department of Health's Office of Operations, Eligibility and Pharmacy, said that he was not sure how much Maryland would save by joining the pool. However, he added, "We do know that there is going to be an effect and that there will be savings" (Baltimore Sun, 4/25).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.