Delaware Takes on High Prescription Drug Costs by Leveraging Public Purchasers

Delaware’s state Legislature has established the Interagency Pharmaceuticals Purchasing Study Group to recommend steps to leverage bulk purchasing of drugs to effectively negotiate lower prices by using interagency and multistate purchasing contracts, and other approaches. The measure easily passed the House on a voice vote and unanimously passed the Senate.

The study group has an ambitious agenda and must report its findings and recommendations to Gov. John Carney Jr. and the state legislature by Dec. 31, 2109.

Health care spending in Delaware exceeds the national average and has historically outpaced inflation and the state’s economic growth. The bill’s authors wrote, “…  a major cause of skyrocketing prescription drug prices is bargaining asymmetry, by which the pharmaceutical industry, often wielding monopoly power, is left unchecked, in the absence of a strong counter-party at the bargaining table.”

Lawmakers noted that, “establishing a single-purchaser for the highest-cost prescription drugs will move Delaware one step closer to a comprehensive solution for affordable and accessible health care for all.”

The study group will be co-chaired by a state representative appointed by the Speaker of the House and a state senator appointed by the senate’s President Pro Tempore. Two more lawmakers will be appointed to achieve bipartisan representation, and the following additional members or their designees will be appointed:

  • Controller General
  • Secretary, Department of Health and Social Services
  • Director, Office of Management and Budget
  • Commissioner, Department of Corrections
  • Secretary, Department of Services for Children, Youth, and their Families
  • Director, Division of Medicaid and Medical Assistance
  • Director, Division of Public Health
  • Secretary, Department of Human Resource
  • Administrator, Delaware Veterans Home
  • One member of the State Employee Benefits Committee

Delaware joins California and New Mexico and other states leading the way to leverage and combine their collective purchasing power to lower drug spending. The National Academy for State Health Policy will continue to report on their progress.

For more information about what states are doing to harness their purchasing power to curb health care costs, read: Cross-Agency Strategies to Curb Health Care Costs: Leveraging State Purchasing Power, April 2019.