Friday, April 23, 2004
Copyright © Las Vegas Review-Journal
Medicaid to save $5 million
By SEAN WHALEY
REVIEW-JOURNAL CAPITAL BUREAU
CARSON CITY -- Nevada's costly Medicaid program will save about $5 million a year in prescription drug costs as a result of federal approval of a first-ever joint-purchasing agreement among five states, a state official said Thursday.
Charles Duarte, administrator of the state's Medicaid program, said the program should be fully operational by August.
"This agreement will give us negotiating clout with the drug companies," he said. "It won't be just one state negotiating with a large corporate entity."
The purchasing power of the states and their 900,000 Medicaid recipients means the drug companies will offer supplemental rebates, which reduce the net price paid for the drugs, said Duarte, who oversees the Division of Health Care Financing and Policy.
With about $100 million a year spent on prescription drugs in Nevada for Medicaid recipients, the savings equates to about 5 percent, he said.
The five states participating in the program are Michigan, Vermont, New Hampshire, Nevada and Alaska. The program requires that they adopt a list of drugs that doctors should use when treating low-income Medicaid patients. The states then bargain together for discounts on the drugs.
Duarte said the deals on pharmaceutical drugs will include antibiotics and those used for treating hypertension, among others.
The development of the cooperative is already well under way, he said.
The agreement was approved by Tommy Thomson, secretary of the U.S. Department of Health and Human Services.
"By using the proven technique of negotiating lower prices, states will reap important savings on their drug costs," Thompson said. "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."
All five of the states in Thursday's announcement have signed agreements with First Health Clinical Services Inc., a pharmaceutical benefit manager, to negotiate lower prices on their behalf with manufacturers.
The Associated Press contributed to this report.
