To reduce expenses, Michigan and Vermont will buy pharmaceuticals in bulk jointly for their Medicaid recipients under a new program announced by both governors.
The two states are the first to make such an arrangement, which builds on an existing Michigan program, a release by the Michigan Department of Community Health says.
The Michigan Pharmaceutical Best Practices Initiative, started a year ago, is saving the state $850,000 a week, according to a Thursday release.
The release says the combined purchasing power of Michigan and Vermont will be used to negotiate lower prices from drugmakers, on top of rebates that manufacturers extend to participate in Medicaid.
"By pooling our state Medicaid program with the state of Michigan's, we expect to generate greater savings than would otherwise be the case," states Vermont Republican Gov. Jim Douglas in the release.
"We are eager to move forward with the state of Vermont on this important and innovative partnership because we know by increasing our purchasing power we can immediately save taxpayer dollars," says Michigan Democrat Gov. Jennifer Granholm.