Quote of note:
A spokesman for HHS' Thompson said the federal agency cannot approve the Michigan-Vermont program in its current form. The reason: The states did not comply with federal rules on how to hire private contractors to negotiate discounts with the drug companies.
Roadblocks frustrate state efforts to cut drug costs
Mon Mar 1, 7:53 AM ET
In Michigan, the governor is proposing a 75-cent tax increase on cigarettes to help fund the skyrocketing health care costs of the state's low-income residents. And Colorado has cut $200 million in the past two years from higher education to offset part of its escalating Medicaid bills
Tired of raiding other important programs, governors are eager to find ways to trim their Medicaid budgets, which jumped an average 9.3% last year. But when Michigan, Vermont and South Carolina tried joining forces to save millions of dollars on prescription drugs, they ran into federal foot-dragging and industry opposition.
The upshot? Michigan and Vermont, which saved $9.6 million last year when they launched the program, now find their joint venture in jeopardy. And South Carolina got so frustrated that it gave up.
…Michigan's original idea was simple: Combine its 1.3 million Medicaid recipients with those in other states to obtain bigger savings. The plan is based on California's discount program, which has snagged $382 million in Medicaid drug rebates this ear.
But from the moment Michigan and other states began building the foundation for a pooling plan, they faced obstacles:
Court challenge. The drug industry, which stands to lose millions, sued Michigan in 2001, when the state first sought discounts for drugs included on a "preferred" list that Medicaid patients would be able to obtain without prior state approval. The industry argued the state agency running Medicaid went beyond its authority in setting up the new list. A state appeals court allowed the list to go forward, though a hearing on the dispute is scheduled for April.
Federal stalling. Michigan health officials say they've had to deal with shifting demands and questions from federal officials. Vermont and South Carolina leaders echo the frustration. "Unfortunately, when we answer one set of concerns or questions, CMS (Centers for Medicare and Medicaid Services) invariably finds an entire new set of questions that serve to delay implementation further," Vermont Gov. James Douglas said in a letter Thursday to HHS' Thompson.
South Carolina Health and Human Services Director Robert Kerr said he pulled an application to join the pool after federal officials used it to demand answers on another Medicaid issue. "They were holding the multistate pool agreement hostage," he said.
Tripped by bureaucratic barriers
The Pharmaceutical Research and Manufacturers of America (PhRMA), the drugmakers' trade group, has complained that the joint state-buying plans could hurt poor patients by limiting their access to some drugs they might need. But that argument ignores the fact that even if states negotiate discounts on some drugs jointly, each still is free to buy other drugs on its own.
A spokesman for HHS' Thompson said the federal agency cannot approve the Michigan-Vermont program in its current form. The reason: The states did not comply with federal rules on how to hire private contractors to negotiate discounts with the drug companies. Seeking joint discounts "is a fine idea," said HHS spokesman William Pierce. "We think the states should pursue it, but they must play by the rules."
Posted by P6 at March 2, 2004 06:30 AM
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Comments
Dean was a screamer- never mind health care policies that had some progressive measures.
He was not my favorite candidate, but nonetheless he had some merit in several positions.