Vermont to form first prescription drug pool with Maine, Iowa

While Vermontanticipates $4 million in returns this year on its 121,000 Medicaidbeneficiaries, Iowa expects $11 million and Maine nearly $5 millionon their collective lives.  Governor Douglas noted, “This represents andextraordinary accomplishment for our states of which we can be veryproud.” Jason GibbsGovernor’sCommunications Director109 State Street ¨ The Pavilion ¨ Montpelier,VT 05609-0101 ¨ www.vermont.gov/governor(link is external)Telephone: 802.828.3333 ¨ Fax: 802.828.3339 ¨ TDD: 802.828.3345 ### Governor Douglas stated, “Medicaid drug costshave grown dramatically in recent years.   States have control over what we coverunder Medicaid and how much we pay for it.  Medicaid programs have beeninnovative in creating cost-saving strategies like Preferred Drug Lists andappropriate drug utilization programs.  The preservation of the benefit weprovide our citizens is a top priority; however, we must work to controlspending in order to ensure coverage.  In the absence of federal initiatives, ithas been necessary for states to be creative in finding ways to contain costs.  Thecreation of the SSDC is the next step in the ongoing effort to control theincreases in drug costs while maintaining a comprehensive drug benefit.”   Two other Medicaid pools have been approved by CMS.  These pools aremanaged by pharmacy benefit management companies contracted to select states.  Oneof the unique components of the SSDC as a state administered pool is that anystate can participate regardless of how they administer their Medicaid pharmacybenefit, through state or contractual resources, and the SSDC will beencouraging other states to look at this model in the future.  Anotherdistinction is that the SSDC process is completely transparent to its members. All participating states have access to the full terms and conditions of allbids by pharmaceutical manufacturers.  States then collectively review the bidswhile independently deciding which are appropriate for each of our states.  Atthe same, this arrangement can assure that 100 percent of negotiated rebatesare returned to the Medicaid program – a no contractor can profit bysharing in the rebates. Montpelier, Vt. – Governor Jim Douglas announced today thatVermont, Iowa and Maine have formed a first in the nation, state administeredprescription drug purchasing pool, that is expected to save Vermont approximately$4 million this year.  On July 20, 2006 the Centers for Medicare and Medicaid Services approvedthe operation of the Sovereign States Drug Consortium (SSDC), collaborationbetween Vermont, Maineand Iowa. Program Expected to Save Vermont $4 Million This Year In a Medicaid drug rebate pool, states leverage their collectivecovered lives to negotiate for discounts in drug costs.  Statesuse Preferred Drug Lists to promote clinically appropriate alternatives thatare the most cost effective in the individual states.  Preferred products maybe generics, low cost brands, or higher cost brands where the drugmanufacturers provide a financial incentive to have their products preferred. The incentive is provided through a negotiated rebate from the drugmanufacturers based on actual utilization.  The more states in a pool, the higherthe utilization, and, thus, the greater the rebate negotiated.  GOVERNORDOUGLAS ANNOUNCES VERMONT TO FORM FIRST-EVER STATE ADMINISTEREDPRESCRIPTION DRUGPURCHASINGPOOL WITH MAINE AND IOWA