Iowa Joins Pool to Negotiate Drug Savings
Iowa Joins Pool to Negotiate Drug Savings
DES MOINESGov. Tom Vilsack announced today that Iowa will join a new prescription drug purchasing pool that is expected to save the state's Medicaid program at least $3 million in the next two years.
"Pooling our drug purchases with other states allows us to uphold our responsibility to vulnerable Iowans by ensuring they can receive the medicines they need," said Vilsack. "By teaming up with other states and thinking creatively, we can save money and ensure healthcare security for Iowans."
The new Sovereign States Drug Consortium also includes Vermont and Maine. At least two other states are likely to join, and Vilsack said discussions have started with several others in hopes of expanding the consortium's negotiating power with the pharmaceutical industry.
Assuming five states form the pool at the outset, the first year cost will be $127,000, with year two and three costs being $82,500 each. Iowa is expected to save between $1.2 million and $1.4 million in the first year (state and federal funds combined), and between $2.4 million and $2.6 million the second.
Vilsack said that Iowa could have joined several other state purchasing pools with comparable returns, but they would have compromised other state initiatives to reduce the cost of prescription drugs. He said the Sovereign States pool is preferable because it will have a non-profit administrator and because it allows member states to have flexibility in operating existing preferred drug lists (PDLs).
PDLs give preference for certain similar Medicaid-paid pharmaceuticals based on rebates negotiated with manufacturers. The consortium will negotiate the best deals for preferred drugs that already exist in the Iowa PDL. It will also seek to provide potentially superior deals for other drugs.
Rapidly rising prescription drug costs now consume about 17 percent of Iowa's Medicaid budget. Medicaid covers 300,000 Iowans at a total state and federal cost of about $2.3 billion.
http://www.governor.state.ia.us/news/2005/november/november1605_2.html