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The governors of New Hampshire, Vermont, and Maine announced that they have created a multi-state pool for the purchase of prescription drugs. The purchasing pool will include the Medicaid populations from all three states, about 330,000 people. By working together to focus on quality and management efficiency, the three states hope to save an estimated 10% to 15% on their prescription drug programs. The benefits of the combined purchasing pool will be available on a voluntary basis to other groups, including uninsured individuals, and businesses. They released a request for proposals, seeking bids from pharmacy benefits management companies to operate the purchasing pool.

Despite pharmaceutical industry opposition, the US Health Care Financing Administration (HCFA) approved an extension of an existing Medicaid demonstration in the state, allowing a proposed drug discount program to be implemented this January, making Vermont the only state in the nation with a pharmaceutical program as part of Medicare, according to Peter Van Vranken, a health policy analyst for Vermont Governor Howard Dean.

Under the Vermont Health Access Plan (VHAP), some 37,550 Medicare beneficiaries will be eligible to buy prescription drugs at discounted prices through the state's Medicaid program. The expanded program also includes 31,350 individuals who are under 300% of the federal poverty level. Individuals who pay a $24 annual enrollment fee will receive a card entitling them to receive a discount on drug purchases at the pharmacy.

State officials estimate that participants eventually will be able to purchase drugs at savings of about 30%. In a letter to HCFA, the Pharmaceutical Research and Manufacturers of America (PhRMA) challenged Vermont's program on grounds that it would run afoul of Medicaid law. However, the Congressional Research Service later determined that HCFA could grant a waiver without violating Medicaid law.