White House OKs Prescription-Drug Purchasing Pools

The Bush administration has approved a plan in which states can form a purchasing pool to negotiate discounts on prescription drugs for Medicaid patients.

Michigan, Vermont, and South Carolina began efforts to establish the purchasing pool more than a year ago, but could not reach agreement with the Centers for Medicare and Medicaid Services (CMS). As of April, Tommy Thompson, secretary of the Department of Health and Human Services, was claiming that the states had not complied with federal rules on how to hire private contractors to negotiate the discounts (Psychiatric News, April 2).

The states had accused the CMS of putting multiple obstacles in the path of states that wanted to form the purchasing pool.

According to the April 23 New York Times, the Pharmaceutical Research and Manufacturers of America, which had opposed the plan, issued a written statement saying the purchasing pool could turn Medicaid into “the equivalent of a government-run health maintenance organization, making decisions based on cost rather than the needs of individual patients.”

Alaska, Michigan, Nevada, New Hampshire, and Vermont will participate in the plan, and other states might join.

South Carolina officials had abandoned the effort, according to Robert Kerr, the state’s director of health and human services, because federal officials used the state’s application to demand answers about another Medicaid program.

New Hampshire Gov. Craig Benson (R) thinks the plan will be an effective cost-control measure. “The multistate pooling initiative will go a long way to streamline costs and provide affordable medication to low-income citizens,” he said.

The five states estimate that the program will save them more than $12 million in 2004. ▪