Negotiating Lower Prices for Drugs
Holding drug costs down is among the biggest challenge facing both local and state officials struggling to control health insurance expenses. For example it has been a big factor in decisions by Public Employees Insurance Agency officials in West Virginia to reduce benefits.
State officials already do their best to negotiate with pharmaceutical companies. They have had some success.
Late last year, state legislators were told they ought to look to the private sector for help. Officials of Innovative Rx Strategies, an Illinois firm, said their company often can help clients reduce prescription drug costs by as much as 15 percent. That may not sound like much to those used to seeing “50 percent off” sales at stores, but to anyone who has to buy a lot of medicine, the significance is clear.
Innovative Rx Strategies officials told lawmakers that, as veterans of the drug industry, they understand the tricks of the trade.
For their efforts, they charge a fee of about 20 percent of what clients save.
It makes sense. If state officials can find a consultant able to help hold drug prices down, they should try the approach, at least on a trial basis. When health care costs are involved, every little bit of savings helps.