Six Southern States to Create Rx Drug Purchasing Pool
Six "mostly southern" states are expected to announce today that they will form a drug purchasing pool to lower prescription costs for their state employee and retiree health plans, the Wall Street Journal reports. West Virginia "has led the effort," the Journal reports, which began in March when the state realized that it was "too small by itself" to secure significant rebates from drug companies. Although West Virginia officials have said the group would have 1.2 million members, they would not disclose which states are set to join the pool. The Journal reports that Maryland, Mississippi, Missouri, North Carolina, South Carolina and Washington attended summer meetings to discuss the proposal. The new coalition will use a pharmacy-benefits manager to negotiate discounts with drug companies and to manage claims processing, but, unlike other state coalitions, it will not give the PBM a portion of the negotiated rebate. Instead, the states plan to offer the PBM "larger-than-usual" administrative fees. The six states will establish a "preferred drugs" list and offer lower copayments to enrollees for those prescriptions. The group is expected to invite other states, as well as private employers, to join the pool. (Gold, Wall Street Journal, 10/17). The new group follows the lead of the Northeast Legislative Association on Prescription Drug Prices, a combination of seven New England states as well as New York and Pennsylvania. In this coalition, states will pool their purchasing power to "extract larger price concessions from drug companies" and provide discounts to Medicaid beneficiaries and some state residents not covered by public health programs (California Healthline, 7/30). The Northeastern states will meet Oct. 19 in Montpelier, Vt., to discuss finalizing the plan (Wall Street Journal, 10/17).