Jennifer Kent dismissive of Medicaid drug bulk purchasing agreements with OR and WA

States along the West Coast are exploring the option of establishing bulk purchasing agreements as a means to drive down prescription drug costs. But, based off recent comments made by Jennifer Kent, Director of California’s Department of Health Care Services, it seems unlikely that California will team up with Oregon or Washington to establish these kinds of drug purchasing partnerships in relation to Medicaid.

 

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This year, lawmakers in Oregon introduced HB 2679, a bill that would direct the administrator of the Oregon Prescription Drug Program to solicit an agreement from California authorities to cooperate on a bulk purchasing agreement.

The bill passed unanimously out of the House Committee on Health Care in April and was sent to Ways and Means. It hasn’t moved since, and there is a little over a month remaining in the regular session.

In Washington, a section of its recently signed prescription drug price transparency bill states:

“The authority must contact the California office of statewide health planning and development and the Oregon department of consumer and business services to develop strategies to reduce prescription drug costs and increase prescription drug cost transparency.”

This year, California is taking new steps to use its own massive purchasing power.

Shortly after taking office in January, Gov. Gavin Newsom signed an executive order directing the state to coordinate a consolidated drug purchasing program for California’s 13 million Medi-Cal beneficiaries.

In a recent POLITICO California Pro Q&A, Kent outlined some of the benefits this transition will have for Medi-Cal beneficiaries. One benefit is that it will maximize the state’s purchasing power.

“Part of the governor’s proposal was I’m going to consolidate my leverage and negotiating power and instead of negotiating and getting rebates for 2 million people, I’m going to negotiate and get rebates for 13 million people… I’ve got 24 plans, each with their own pharmacy benefit manager and each with their own ability to negotiate, so we will take it all back,” Kent said.

The second reason for consolidating the state’s purchasing power, according to Kent, is it will standardize the benefit.

However, as it relates to their Medicaid programs, it appears Oregon and Washington will have a difficult time entering into such an agreement with California.

When asked about conversations related to working with Oregon and Washington on bulk purchasing, Kent was dismissive of the idea.

“They have wanted to. Their leadership in those states have said they we want to join our Medicaid programs with your Medicaid program and let’s just buy all together.

And we’re like, you combined as two Medicaid programs are a million people.

We’re 13 million.

So the purchasing and negotiation for us doesn’t get us anything.”