The University Hospital could benefit from a potential change to the Medicaid drug-pricing program that would allow the state to require more patients to get their drugs from the U.
As a 340B reduced drug cost program provider, the U treats many hemophilia and bleeding disorder patients eligible for reduced-cost prescriptions through Medicaid. Through a waiver from the federal government, the Utah Department of Health sends Medicaid patients to the U Hospital to decrease costs.
Utah lawmakers want to expand the program, so the U will be responsible for distributing drugs to patients with problems other than blood disorders.
“Because more hemophilia patients are being moved to the University of Utah hospital, we do gain from the 340B program overall,” said Jim Jorgenson, director of the U’s pharmacy services.
The program was started in 1992 with the Veterans Health Care Act and has saved Utah millions of dollars, because the drugs can be distributed through a state-approved hospital rather than sending rebates to drug companies, Jorgenson said.
“When a Medicaid patient goes to the average corner pharmacy, the state pays the pharmacy and waits for rebates from the drug company which can be delayed or mistaken, costing the state millions of dollars,” he said.
In an effort to reduce costs, the federal government granted the state its current waiver for blood disorder patients more than 10 years ago, requiring patients to buy drugs from providers such as the U pharmacy.
“This waiver is great for us,” said Tim Morley, the drug utilization review program manager for the 340B system. “But we have to be careful working with rebates through regular pharmacies and the 340B drug providers — mistakes can be accidentally made,” he said.
Increases in Medicaid costs have urged Utah legislators to find ways to save money with the program. The Medicaid funding for prescription drugs increased in 1990 from $4.4 billion to $26.6 billion in 2003, a 6 percent increase in the state budget directed toward health care.
“Research is being conducted for the potential utilization of the drug-pricing system and different methods of bringing that about,” said Utah Rep. David Litvack, D-Salt Lake City. “There are dozens of possibilities for expanding the drug program, but right now nothing has been decided.”
The program has saved the state more than $3 million dollars since 2003 and could assist further, if more patients who require drugs at reduced costs were to receive them from the U.
“We’re at the beginning stages of finding out what the federal government will allow us to do,” said Cathy Dupont, associate general counsel for the state.
The 340B program does not require Medicaid patients to pay more for drugs and could make more state money available to patients, Dupont said.
“If the Medicaid program can save money, it could make Medicaid more available and pay providers more for their services,” she said.