Governors pool efforts in Rx plan

CONCORD, N.H. – The governors of New Hampshire, Maine and Vermont announced a joint prescription buying plan Thursday they said will be the nation’s first such multistate program to cut drug costs for consumers.

The program should be up and running by Nov. 1.

The plan calls for the three states to pool the Medicaid money they receive for the 330,000 people they serve that are covered by the government-subsidized health insurance program for the poor and disabled.

Through the combined buying power, the states expect to save 10 percent to 15 percent a year on prescription drugs. They currently spend $387 million on prescription drugs for Medicaid programs.

In addition to buying power, the pool will allow the three states to cut costs in administration of Medicaid funds and in the managing of the types of prescription drugs that recipients take.

The states have chosen First Health Services Corp. of Virginia to manage the pool.

The formation of the program is the culmination of a yearlong effort by the three states to help people get better prices on prescription drugs. The governors met in February 2000 in Concord to discuss common health care concerns.

“Too many of our citizens are struggling to pay the high cost of prescription drugs to stay healthy,” New Hampshire Gov. Jeanne Shaheen said during a conference call with Vermont Gov. Howard Dean.

Maine Gov. Angus King was called away unexpectedly to the West Coast and did not participate in the call, though he issued a statement.

“The Tri-State Initiative, along with Maine Rx, are crucial pieces of this puzzle,” King said. “Once again, New England is leading the national charge.”

The Maine Rx law, the first of its kind in the country, allows Maine to negotiate with drug companies for lower drug prices for approximately 325,000 residents who don’t have insurance for prescription drugs. It also allows the state to impose price controls in three years if negotiations don’t lead to steep price reductions.

The governors said other states could join the joint pool down the road. Massachusetts and Rhode Island have already shown interest, the governors said.

Dean said the problem of high prescription drug prices is especially acute in northern New England.

“These prices are completely out of control,” Dean said. “Our Medicaid budgets are completely out of control. If we’re going to maintain health benefits, we’re going to have to control costs.”

David Minnis of the New Hampshire Pharmacists Association said the real savings from the pool will be in the processing of claims and in changing consumers’ buying patterns.

Shaheen called the agreement the result of “Yankee ingenuity,” saying that each state’s specific health needs will be met through the pool.

“The high cost of prescription drugs is a national problem and it cries out for a national solution,” Shaheen said. “But until Congress and the president take action, we are going to have to keep working here in New Hampshire.”