HARRISBURG — Seeking savings under the state’s Medicaid prescription drug program, Sen. Dan Laughlin will introduce legislation for the state to hold a reverse auction for a Pharmacy Benefits Manager (PBM).
“A PBM reverse auction is a competitive online bidding process that a state uses to select an entity to administer the state’s prescription drug program,” said Senator Laughlin. “Reverse auctions are commonly used in the public sector procurement process and generally known for their potential to generate significant cost savings.”
The auction begins with an opening amount and allows qualified bidders to counterbid lower prices until a bid is accepted. Currently, New Jersey, New Hampshire, and Maryland have implemented PBM reverse auction legislation. Ohio recently included language in its state budget bill allowing its Medicaid department to also pursue reverse auctions.
New Jersey’s PBM reverse auction has produced savings of more than $2.5 billion to date. In Connecticut, the state’s recent PBM reverse auction included not only pricing, but also technical responses and helped the state realize significant cost savings of around 10% and increased transparency. in the Connecticut PBM contract.
“Technology is available to provide transparency in both the bidding and implementation of the PBM contract to assure taxpayers that Pennsylvania’s Medicaid program is using the most competitive drug prices, allowing to achieve substantial cost savings without compromising the quality of health care,” said Senator Laughlin.
Contacts: Matt Azèles 717.787.8927