The agreement this week among the governors of Maine, New Hampshire and Vermont to purchase prescription drugs together for nearly a million low-income people starts this region on an important, money-saving plan. Now these states should look for further areas of cooperation to make these health plans even more effective.
The tri-state plan, scheduled to begin next summer, relies on purchasing power to allow a pharmacy-benefit manager to negotiate better deals with drug companies, just as large health maintenance organizations do. In addition, the agreement provides an opportunity to use the economies of scale in the larger purchasing pool for savings in administration and in the processing of claims. Govs. Howard Dean of Vermont, Angus King of Maine and Jeanne Shaheen of New Hampshire hope what will be the first multi-state buying agreement in the country will save another 15 percent in costs from their current plans.
Given the rising prices of prescription drugs, it is not surprising that this plan isn’t the only one being considered in the region. The legislatures of the six New England states have been talking about a similar regional approach that would be several times as large as this one and, presumably, would use scale even more effectively. And more to the point for this state, the new Maine Rx program, which requires drug companies to negotiate lower prices with the state, has several of the same features in the tri-state plan.
Currently, Maine Rx and the tri-state plan are more complementary than over overlapping. For instance, the one announced this week also includes opportunities for patient education on shopping for equivalent but less-expensive medicine and can offer a drug interaction program to ensure the combination of drugs a person might be taking is appropriate. The Maine Rx program more heavily emphasizes bringing down costs, by agreeing to pay only a lower international price if a company refuses to negotiate. It may be for that reason that the pharmaceutical industry, which dislikes the Maine Rx program intensely and has had initial success against it in court, looks more favorably on the alternative tri-state plan.
If Maine Rx, or pieces of it, survive the court challenge, however, the three states – six, if the legislatures can work something out – should begin merging these drug plans, creating further opportunities for saving money and simplifying them for the public. Success for Maine in court would tell the other states that they could adopt some of the polices in the Maine Rx, such as the profiteering restrictions and the rule on a few of the most expensive drugs that requires prior authorization before being prescribed.
It is understandable that there is some overlap in programs being assembled because Congress, where the reform should be taking place, is incapable of acting in any meaningful way on health care. So the states are doing it in pieces, and the piece Maine, New Hampshire and Vermont has created is very good. But the next step is to put the pieces together into a simpler, more coherent whole.
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