Deal on Medicaid purchases to save Nevada $5 million

Friday, April 23, 2004 | 10:56 a.m.

CARSON CITY -- An agreement with four states will enable Nevada to save an estimated $5 million annually on its drug purchases for Medicaid recipients, officials said Thursday.

The state currently spends $100 million a year in buying prescription drugs for the poor people enrolled in the federal-state Medicaid program.

Gov. Kenny Guinn said the state joined with Michigan, Vermont, Alaska and New Hampshire to pool their purchasing power to gain deeper discounts from drug companies.

Chuck Duarte, chief of Medicaid for Nevada, said this would give the pool more "clout" in buying large quantities of drugs. He said Michigan first approached Nevada about a year ago with the idea.

He said the state has been working for the last four to five months with the federal Centers for Medicare and Medicaid Services, which has now approved the joint arrangement.

Duarte said this was the first pooled arrangement between states to collectively buy drugs for Medicaid programs. He said other state programs such as Senior Rx and Nevada Check-Up, would not be part of the pool. Senior Rx is a low-cost prescription drug program for senior citizens and Check-Up is a health care system for children from low-income families.

Guinn said, "This is an historic agreement, one that will mean a great cost savings to our taxpayers." He said the states worked "extremely hard" on the plan and he thanked Health and Human Services Secretary Tommy Thompson for approving the joint effort.

Guinn said the five states signed an agreement with First Health Clinical Services, Inc., a pharmaceutical benefit manager, to negotiate lower prices on their behalf with manufacturers.

Duarte said full implementation of the program will probably take place in August.

Guinn said the continued escalation in the cost of providing prescription medicines has strained many state Medicaid budgets. Nevada's annual Medicaid budget is $1 billion. The federal government chips in 56 percent and the state supplies 44 percent.

In determining what drugs are on the preferred drug list, states use a committee of clinicians and pharmacists to review medical needs before considering the discounts offered by drug manufacturers. The governor said the review ensures that the preferred drug list will provide Medicaid beneficiaries access to all drugs needed.