Hawai'i in six-state pool to buy drugs
By Karen Blakeman
Advertiser Staff Writer
In an attempt to command cheaper prescription-drug prices, Hawai'i plans to team with five other states to buy drugs for Medicaid patients in bulk, Gov. Linda Lingle announced yesterday.
The other states are Michigan, Vermont, New Hampshire, Alaska and Nevada. The pool, which would be the first of its kind, is expected to be approved by federal Medicaid authorities as early as this week.
"This innovative program will help our state control our escalating Medicaid drug costs," Lingle said.
Under the proposed program, First Health Services, a pharmacy benefit administrator of state Medicaid programs, would combine Hawai'i's drug purchases with those of the other five states.
"Our goal is to equal or exceed the purchasing power of the largest states in the nation," said Lillian Koller, director of Hawai'i's Department of Human Services.
The pooling program would allow the states to share in rebate contracts with pharmaceutical manufacturers, who bid against one another for state purchases.
Koller said Hawai'i's Medicaid population, about 37,500 low-income patients, is tiny compared with states with larger populations, such as New York and Florida.
"When we'd stand alone and try to negotiate for deep drug discounts," she said, "they (the pharmaceutical companies) would belly laugh. Some wouldn't even bother to negotiate with us."
The cost of Medicaid programs in each state is split between the federal and state governments. In Hawai'i, the state pays about 40 percent, Koller said.
She said Hawai'i's Medicaid drug budget is about $100 million a year, and has increased about 20 percent annually over the past several years.
The multistate prescription drug pool must be approved by the federal government's Centers for Medicare and Medicaid Services, Koller said.
Jennifer Granholm, governor of Michigan, said in a press release that Tommy Thompson, secretary of Health and Human Services, had assured her the pool arrangement would be approved.
