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PA Secretary of Public Welfare Urges General Assembly To Support Saving $100 Million Through Smarter Pharmacy Benefit Management
Date:6/17/2008

Richman Highlights $681 Million in Savings in Past 4 Years

HARRISBURG, Pa., June 17 /PRNewswire-USNewswire/ -- If state legislators are serious about saving taxpayer funds, they should support the Department of Public Welfare's plan to save $100 million a year by paying less for prescription drugs for children and families who receive health care through the Medicaid program, Secretary of Public Welfare Estelle B. Richman said today.

"Every budget season we hear a lot of rhetoric about how DPW 'could' save money - yet, the General Assembly has not embraced our commonsense and workable plan to reduce costs by assuming management of our pharmacy programs," Richman said. "Our plan makes sense for the consumers we serve, for doctors who want a unified system, and also for the taxpayers who pay the bills."

Currently, drug purchases are split between seven Medicaid managed care organizations (MCOs), which puts those firms in a weak bargaining position with big pharmaceutical companies. In addition, those organizations are ineligible for rebates available to the Medicaid program. Under federal law, only DPW can get those rebates.

When DPW becomes the single buyer, the state will have stronger purchasing power to negotiate better prices on medications - on average, saving 30 percent over the prices the managed care organizations pay. Also, DPW will collect every penny of available rebates.

Richman said 20 other states have implemented this change for some or all of their drugs, resulting in great savings for their taxpayers.

"The managed care organizations and pharmaceutical manufacturers that benefit from the status quo are fighting against this important proposal," Richman said. "We hope the General Assembly will put taxpayers first by supporting our plan to save $100 million a year."

Richman said the Department of Public Welfare, at Governor Rendell's direction, has achieved more than $681 million in savings in just
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SOURCE Pennsylvania Department of Public Welfare
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