Drug costs in a Pa. dispute

0 Comments | Philadelphia Inquirer, The, June, 2008 | by Josh Goldstein Inquirer Staff Writer

Gov. Rendell says he can save $95 million a year by changing the way Pennsylvania buys drugs for the massive Medicaid program. The administration wants to centralize drug purchasing, now handled by HMOs, within the Department of Public Welfare because the law allows the state to get far larger rebates than commercial insurers.

"The government can get a 30 percent rebate on the cost of the pharmacy, and the managed-care companies cannot," said Donna Cooper, Rendell's policy director. Not so fast, respond Republicans in the legislature, backed by the powerful managed-care and drug-company lobbies. The opponents contend that although Rendell's drug "carve-out" plan could trim nearly $100 million from the Medicaid budget, hidden expenses would siphon off the savings. And they...