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By Karen Pallarito
NEW YORK, Mar 26 (Reuters Health) - In a drive to reduce drug expenditures, officials from a half dozen states met on Friday to discuss plans to form a drug-purchasing pool.
The states hope to extract rebates from pharmaceutical companies by flexing their collective purchasing power. Although details of the West Virginia-led initiative have yet to be worked out, the concept is attracting plenty of interest.
"Actually, today we've been getting calls from states that weren't invited that want in," said Bill Case, a spokesman for West Virginia Gov. Bob Wise. The new multi-state initiative will focus initially on state workers and eventually may include Medicaid, he told Reuters Health.
Wise, a Democrat, first proposed bringing together various state purchasers of prescription drugs--including Medicaid--when he ran for office last fall, Case said. "We haven't given up on that," he added, but for the sake of expediency, the initial pooling effort will focus on state employees.
Tom Susman, who is spearheading the project, told Reuters Health that Friday's meeting went well. In addition to West Virginia, officials from Alabama, Georgia, North Carolina, South Carolina, and Washington attended the gathering, he said. And another five to six other states are expected to join the group at a second meeting in Atlanta next month.
Susman said the coalition has not ruled out any particular approach to leveraging rebates. It could be as simple as directing business to one existing pharmacy benefits manager, he said. "We have no preconceived notions."
The effort is similar to an initiative led by Vermont, New Hampshire and Maine. The governors of those three New England states announced plans last fall to accept bids from pharmacy benefit management companies to run a drug-buying pool for Medicaid
Susman, director of West Virginia's Public Employees Insurance Agency (PEIA), which arranges health insurance for more than 166,000 state and public employees and their families, determined that the best way to move quickly on the pooling initiative would be through the PEIA, and he is the one who started looking outside the state to broaden the pool, Case explained.
Jeff Trewhitt, a spokesman for the Pharmaceutical Research and Manufacturers of America, suggested that states' concern about drug costs is misdirected. The drug inflation rate ran just 3.9% last year and averaged 2% to 5% from 1995 to 2000, which is down sharply from average price increases of 10% annually throughout the 1980s, he said.
Meanwhile, the pharmaceutical industry's investment in new drugs has produced far more effective treatments, which have reduced deaths and kept people out of the hospital, he said.
"Yes, there's an upfront cost, but stop to think about the costs that are being eliminated along the way," Trewhitt urged. "I guess the question has to be asked, 'What are they willing to pay for progress?' "
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