The 131st Annual Meeting (November 15-19, 2003) of APHA

The 131st Annual Meeting (November 15-19, 2003) of APHA

5054.0: Wednesday, November 19, 2003 - 8:32 AM

Abstract #57705

Safety Net Provider Purchasing Alliance

Marice Ashe, JD, MPH, Public Health Institute, 505- 14th Street, Suite 810, Oakland, CA 94612, 510-440-1500,

To address the impact of rising drug costs on uninsured populations, a new joint purchasing program - the Safety Net Provider Purchasing Alliance (Alliance) - is being initiated to leverage the purchasing power of community-based clinics, county clinics and hospitals, and academic medical institutions that make up California’s health care safety net. These providers currently spend an estimated $541 million on outpatient prescription drugs annually. The Alliance is projected to save safety net providers approximately 20 percent on their outpatient pharmaceutical expenditures. The mission of the Alliance is to develop financially and organizationally sustainable activities to help safety net providers optimize the value of outpatient pharmaceutical care for their patients. It combines the U.S. Public Health Services’ 340B drug discount program and with the Prime Vendor group purchasing organization to maximize the benefits of each cost-savings strategy. Alliance participation is open to all safety net providers that want to improve the value of their drug expenditures and can commit to the Alliance purchasing model. By adopting the successful models of the Veteran’s Administration and Kaiser Permanente, and Los Angeles County, the Alliance will pool California’s safety net providers to maximize their leverage in price negotiations with pharmaceutical manufacturers. A statewide Pharmacy and Therapeutics Committee (P&T Committee) will work with medical and pharmacy schools to develop and review scientific analysis of drugs in crowded therapeutic classes. The P&T Committee will consult with the Prime Vendor to secure the lowest prices through competitive bidding mechanisms that conform to government contracting rules. The central goal is to win more favorable pricing than the participating providers can obtain individually. For providers that already use the 340B program, this means negotiating “sub-ceiling” prices. For providers not in the 340B program, that ceiling is the pricing floor, and the goal is to move the prices as close to the floor as possible. Because of the “best price” rule, the Alliance will pursue a two-tiered pricing structure through coordinated negotiations to win the best prices possible for the two sets of providers and to negotiate the best possible terms with drug wholesalers. The Alliance is a new effort designed by safety net providers who want to achieve high quality medicine at competitive prices. It builds on the success of other large purchasers, and utilizes new opportunities available through a revamped Prime Vendor program.

Learning Objectives:

Keywords: Pharmacies, Safety Net Providers

Related Web page:

Presenting author's disclosure statement:
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.

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The 131st Annual Meeting (November 15-19, 2003) of APHA