Hoosier State Drug Buying Pool Kicks off January 1

September 17, 2004 (PLANSPONSOR.com) - The state of Indiana has created a prescription drug purchasing pool made up of at least 60,000 public employees in an effort to help drive down the Hoosier State's health-care costs.

The pool will include state employee heath plans, as well as plans for employees at the state’s public colleges and universities – almost 60,000 employees in total – and is likewise open to local school corporations, any unit of local government and the Indiana Comprehensive Health Insurance Association (ICHIA), according to a statement from Governor Joe Kernan.

In public events around the state this week, Kernan encouraged local cities and towns, public school districts, libraries and other public entities to join the state partnership after it goes into effect January 1.

The continually rising cost of prescription drugs has been a key factor in employers’ health-care coverage costs in recent years, driving public officials in many areas of the country to turn to less expensive drugs reimported from Canada

“The fact is that the larger this purchasing pool, the more leveraging power we have to drive down the cost of the prescription drugs we are buying for our employees,” Kernan said in his Web site statement. “Lower prices literally mean we are saving taxpayer dollars and having an impact on lowering the costs for prescription drugs across the board.” Kernan signed the enabling legislation into law in March.

The law authorizes the State Budget Agency to contract with a pharmacy benefit manager to administer the purchasing pool. State Budget Director Marilyn Schultz said that Anthem has been selected as the manager and the state has entered contract negotiations with the company. Schultz said that had the state employee and university health plans used the pool in calendar year 2003, the savings could have been as much as $6 million.

Kernan announced in June that work had begun on the Hoosier Health Plan, which targets Indiana’s 600,000 uninsured citizens. The plan, which will be available in late 2005, will offer uninsured individuals and small business owners the chance to join together to negotiate lower costs for health care coverage for themselves and their employees.

In August, Kernan announced changes to the HoosierRx drug benefit program for seniors, including an increase in the discount on the price of medications from 50% to 75%.