Isles accepted into
federal drug plan

The plan could save the state
$4 million in Medicaid costs

Hawaii has been approved to take part in a multistate federal program aimed at bringing down the cost of prescription drugs for Medicaid patients, state and federal officials said yesterday.

Gov. Linda Lingle said the program could save the state about $4 million a year in Medicaid costs.

"The bottom-line importance is it allows us to help more people get health care, and it also saves taxpayers money," Lingle said.

The program requires states to adopt a list of drugs that doctors should use when treating low-income Medicaid patients. States then bargain together for discounts on the drugs.

Hawaii and Minnesota, which also won approval yesterday, bring to seven the total number of participants in the buying pool. The Department of Health and Human Services granted approval in April to Michigan, Vermont, New Hampshire, Nevada and Alaska.

"These states that have come forward to form this pool, if you notice, most of them are smaller states ... and so it was in their interest to try to get together," Lingle said.

Other states have considered forming similar programs. Officials said the federal Centers for Medicare and Medicaid Services sent letters to all state Medicaid directors providing guidance on how to establish similar buying pools.

Opponents of the program include drug companies and mental health advocates, who have sued claiming it would harm patients by limiting their access to drugs. The program requires patients to get special approval for drugs not on the list. Drug companies also must provide discounts to have their drugs listed.

A federal judge upheld the program last year, ruling that Congress gives states broad authority to bargain for lower drug prices. The U.S. Court of Appeals upheld that decision in April.

Since 2003, Hawaii has enacted two other programs aimed at bringing down the cost of prescriptions drugs.

One attempts to match indigent patients with programs that distribute free or low-cost prescription medication donated by drug manufacturers. The other allows those with little or no insurance to buy prescription drugs at Medicaid prices.