9 States and DC Team Up to Assume PBM duties

January 14, 2003 (PLANSPONSOR.com) - Nine states and the District of Columbia are joining forces, forming a nonprofit group to combat the escalating costs of prescription benefit managers and the drugs they provide.

According to the New York Times report, the group being formed will attempt to assist the states in maximizing the prescription drug benefits they can achieve, in a time when many states are facing budgetary cuts.

The plan will see the newly created nonprofit group take over the managerial duties for state worker drug benefits from the pharmacy benefit managers (PBM) currently handling the claims.   Traditionally, the for-profit PBMs attract fees from contracts with the different drug companies, based on the amount of certain prescription medications they dispense to their clients.   By pooling millions of prescription requests together into a single order for a particular medication, the PBM can also secure a steep discount from the regular retail price of these prescriptions.  

Under the new state proposal, the states can benefit by assuming those payments and putting the money back into state medical care costs.

Much like the current PBM system being utilized in the states, supporters of the multi state plan said prescription drugs would still be attainable through both a traditional pharmacy or via mail-order dispensaries.   Additionally, the coalition has expressed an interest in importing certain prescription medications from Canada, which according to the report, often sells the same drugs for less.  

In addition to Washington DC, the states joining in the collation include:

  • New York
  • Maine
  • Massachusetts
  • Connecticut
  • Rhode Island
  • Vermont
  • New Hampshire
  • Pennsylvania
  • Hawaii