| Press Release |
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| July 26, 2006 |
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Governor acts to lower state's prescription drug costs
‘Buying smarter and buying together’ will save taxpayers money, Governor says
Portland, OR—At a roundtable discussion on prescription drugs Wednesday, Governor Ted Kulongoski announced two major initiatives to reduce the costs of medicine for uninsured Oregonians and state and local governments—“Buying smarter and buying together.”
“The rising cost of prescription drugs hurts everybody—families, businesses, and Oregon taxpayers,” the Governor said. “But by buying smarter and buying together, Oregon can save millions of dollars on prescription drugs and provide life-saving medicines at lower cost to taxpayers.”
Citing a report released today by the Heinz Family Foundation, The Oregon Blueprint, the Governor said the state could save up to $17 million a year by consolidating the purchase of prescription drugs, ensuring more transparency and accountability in prescription-drug purchasing contracts, and doing a better job of coordinating drug utilization and using management tools. The Heinz report (see attachment) is the result of an outside review of drug purchases by state agencies that the Governor requested two years ago.
The Governor also announced that Oregon will join the state of Washington to maximize savings for uninsured people and employers in both states by combining the states’ buying power. Creating a Northwest Prescription Drug Consortium, the Governor said, will pool the two states’ drug-purchasing to negotiate better prices and bolster savings for participants.
Buying smarter: Coordinated State Agency Purchasing Plan
In response to the Heinz report, the Governor has directed state Department of Human Services Director Bruce Goldberg to lead an interagency workgroup to develop a coordinated prescription drug purchasing plan for the state. The group will work to achieve the following goals:
- Maximize the state’s purchasing power.
- Improve coordination of services.
- Minimize administrative costs.
- Achieve the greatest possible savings.
The Governor also pledged that his 2007 legislative agenda would include an effort to reduce prescription drug costs by using an enforceable preferred drug list (PDL). By itself, an enforceable preferred drug list for Medicaid could have saved the state more than $15 million since 2002, according to the Heinz report. Unfortunately, the Legislature has blocked Governor Kulongoski’s efforts to implement a Medicaid PDL both in 2003 and 2005.
Buying together: Northwest Prescription Drug Consortium
Oregon will ally with the state of Washington to maximize savings for uninsured people and employers in both states through a new Northwest Prescription Drug Consortium. This plan will combine the buying power of the two states’ purchasing pools to negotiate better prices and generate substantial savings for participants.
Washington Governor Chris Gregoire called the Consortium “great news” for the people of both states. “By pooling our resources, we have provide even greater buying power and can negotiate prices that will potentially save Washingtonians and Oregonians thousands of dollars a year,” Governor Gregoire said. “This partnership is a great example of what we can do when we work together on behalf of consumers.”
Since taking office, Governor Kulongoski has fought to make prescription drugs more affordable. In 2003, he worked with the Legislature to create the Oregon Prescription Drug Program, which has saved more than a half million dollars for uninsured Oregonians in the past 17 months.
Although the pharmaceuticals industry blocked efforts to expand the prescription drug pool in the 2005 legislative session, the Governor remains committed both to achieving maximum savings for Oregonians who can’t afford the prescription drugs they need. He has also placed a high priority on expanding Oregon's program to include all uninsured individuals and private businesses.
“It’s clear that we have an opportunity to save money on life-saving prescription drugs though smart purchasing and pooled resources,” the Governor said. “This is about accountability—making government accountable to taxpayers, and making the best possible use of tax dollars. It’s also about the health of thousands of Oregonians—individuals and employers—who struggle to afford the cost of health care. By creating opportunities for employers to save money on health insurance for their employees, and for uninsured Oregonians to get their prescription medicines at discounted prices, we all benefit from a healthier Oregon.”
Media Contacts:
Lonn Hoklin: 503.378.6169
Charlie Burr: 503.378.6496
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