State Health Department Today Announced First Health Has Been Selected to Provide Medicaid Pharmacy Management Services

ALBANY, April 28, 2005 – The State Health Department today announced that First Health Services Corporation (FHSC) has been selected to provide support for new pharmacy management services under the State's Medicaid program. FHSC will assist in the implementation and operation of the new preferred drug program, a new clinical drug review program, and other key activities to help rein in the costs of drugs under Medicaid.

As part of Governor George E. Pataki's leadership efforts to bring critical reforms to New York's health care system, this new initiative will provide a comprehensive range of support services, including call line assistance for physicians using New York's preferred drug program (PDP) and negotiation of additional drug rebates with pharmaceutical companies. These new programs will significantly curb the escalating cost of prescription drugs in the State's Medicaid program, with estimates showing a first year savings of $200 million and an additional $400 million savings when fully implemented in State Fiscal Year (SFY) 2006-07. In 2004 alone, New York's Medicaid prescription drug costs totaled $4.5 billion.

State Health Commissioner Antonia C. Novello, M.D., M.P.H., Dr.P.H. said, "Today's announcement builds on New York's partnership with First Health Services, which currently serves as the contractor supporting the State's EPIC program. Governor Pataki has once again delivered on his pledge to bring more efficiency to New York's Medicaid program, while continuing to provide recipients with the high quality care they deserve. This agreement will go a long way towards making the Governor's Health Care reforms a reality."

Over 30 state Medicaid programs have successfully implemented PDP initiatives to address the spiraling cost of prescription drugs. With manufacturers providing reduced prices, these programs report significant cost savings. Such programs are generally used for categories of prescriptions that have a large number of very similar brand name drugs.

Additionally, the agreement with FHSC will support New York Medicaid's new Clinical Drug Review Program (CDRP), which is aimed at managing utilization of specific drugs which are subject to potential fraud and abuse, overuse or other inappropriate use.

Implementation of the program is pending approval of the final contract by the Office of the New York State Comptroller.