[ OUR OPINION ]
Drug-buying pool
will benefit patientsHAWAII plans to join several other states in pooling their purchasing power to obtain deeper discounts on prescription drugs. The U.S. Department of Health and Human Services has approved the plan, which Governor Lingle says could save the state $9 million spent on medication for low-income recipients outside of Hawaii's private health plans. The governor should go forward and ensure Hawaii's inclusion in the pool.
THE ISSUE
The federal government has approved a plan for five states, to be joined by Hawaii, to pool their efforts to buy prescription drugs for Medicaid patients.
The program was begun by Michigan in 2002, pending federal approval. It has been joined by Vermont, New Hampshire, Nevada and Alaska, according to Mark McClellan, administrator of the federal Centers for Medicare and Medicaid Services, and Hawaii has applied to become a member. Gov. Craig Benson of New Hampshire says Minnesota and Tennessee intend to join the pool, "with more states likely to follow."
Medicaid, which is jointly financed by the federal government and the states, provides health benefits to 41 million low-income, elderly and disabled citizens. About 900,000 Medicaid patients in the current five member states will be covered in the pooling effort, McClellan said.
More than 184,000 patients in Hawaii are covered by Medicaid. Most are locked into private health plans' prescription drug programs and will not be eligible immediately for the pooling effort's drug price discounts, which have ranged from 10 percent to 15 percent. They could benefit from the pool after the private drug contracts expire next year.
Michigan's negotiations with Washington are said to have been difficult, as federal officials wanted assurance that states would not stifle competition in the pharmaceutical market. Drug companies filed lawsuits and said the program would harm Medicaid patients, but their argument was specious.
"By using the proven technique of negotiating lower prices, states will reap important savings on their drug costs," said Tommy G. Thompson, the health and human services secretary. "The ability to purchase drugs at a lower cost will help states continue to provide critical medications to the millions of low-income citizens who depend on the Medicaid program."
Under the program, each of the participating states adopts a list of drugs that doctors should use when treating Medicaid patients. Part of the savings comes from pharmaceutical companies offering rebates for their drugs to be included in the preferred list. Patients must get special approval for drugs not on the list. Other savings result from the states using the same company -- First Health Services of Glen Allen, Va. -- to negotiate with manufacturers.
Michigan, which spent about $1 billion a year on prescription drugs prior to the program, estimates that it saved $32 million from using the preferred drug list and $8 million from the multi-state bargaining. It stands to reason that Hawaii, which spends about $100 million on drugs for Medicaid patients, will benefit greatly from pooling its purchases with other, larger states.
