Md. Joining 3-State Pool For Medicaid Prescriptions

Federal health officials gave approval yesterday for Maryland and two other states to form a purchasing pool for prescription drugs for their Medicaid recipients, a move that could save Maryland $19 million in 2006.

Maryland, Louisiana and West Virginia become the second multi-state purchasing pool approved by the Centers for Medicare and Medicaid Services, a division of the federal Department of Health and Human Services.

The new group will cover a total of 1.3 million low-income Americans who qualify for free or discounted health care. In most states, the majority of Medicaid beneficiaries are mothers, children, poor elderly or disabled.

Under federal law, states already negotiate discounts with pharmaceutical companies. But many governors have complained that soaring Medicaid drug costs are devouring state budgets. The new purchasing pool, which will be run by Ohio-based Provider Synergies, should be able to negotiate deeper discounts because of its larger numbers.

Joseph E. Davis, a senior official with Maryland's Medicaid program, said he expects the state's discount to increase by about 20 percent as a result of the purchasing pool. He said the savings could help prevent future cuts in benefits or eligibility for the program.

Davis said Maryland asked Provider Synergies to explore pooling options after learning of a similar initiative approved by federal officials last year involving five states. That pool has since expanded to include more states, and Davis said Maryland's pool could grow as well.

Officials estimate that Louisiana will save $27 million under the new system and that West Virginia will save $16 million.

Medicaid, a joint state-federal program for 53 million people, cost about $295 billion nationally in 2004.