TO: | Honorable Jane Nelson, Chair, Senate Committee on Health & Human Services |
FROM: | John Keel, Director, Legislative Budget Board |
IN RE: | HB2298 by Uresti (Relating to the authority of certain state agencies to purchase prescription drugs and other medications jointly with other states.), As Engrossed |
Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
---|---|
2004 | $2,662,932 |
2005 | $2,682,755 |
2006 | $2,727,359 |
2007 | $2,776,997 |
2008 | $2,829,843 |
Fiscal Year | Probable Savings from GR MATCH FOR MEDICAID 758 |
Probable Savings from FEDERAL FUNDS 555 |
---|---|---|
2004 | $2,662,932 | $4,027,852 |
2005 | $2,682,755 | $4,119,363 |
2006 | $2,727,359 | $4,193,116 |
2007 | $2,776,997 | $4,269,430 |
2008 | $2,829,843 | $4,350,678 |
It is assumed that savings achieved through bulk purchasing with other states would be similar to estimated savings achieved through bulk purchasing of prescription drugs within Texas agencies. The Department of Mental Health and Mental Retardation indicates that its practices include the negotiation of the best price and bulk purchasing with other states would not significantly impact its drug prices. The Texas Department of Health and the Department of Human Services indicate no significant fiscal impact.
The Interagency Council of Pharmaceutical Bulk Purchasing has already implemented cost savings strategies related to bulk purchasing; therefore it is assumed that the Medicaid Vendor Drug Program (VDP) could save an additional 1 percent through bulk purchasing with other states. Estimated drug expenditures are as follows: $669,078,300 in fiscal year 2004, $680,211,180 in fiscal year 2005, $692,047,500 in fiscal year 2006, $704,642,700 in fiscal year 2007, $718,052,100 in fiscal year 2008.
A reduction in manufacturers' rebates would partially offset these savings.
Source Agencies: | 324 Department of Human Services, 501 Department of Health, 529 Health and Human Services Commission, 655 Department of Mental Health and Mental Retardation
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LBB Staff: | JK, JO, EB, KF, AJ
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