Setting Up A New Shop

Oregon's former governor is pushing a rational way to control drug costs.
by | December 2003

To tame the prescription drug costs in their Medicaid programs, states are trying everything--from limiting prescription coverage to eyeing Canadian-based purchasing. John Kitzhaber, a former governor of Oregon and physician, and Mark Gibson, his health policy adviser for eight years, are plotting another approach: Provide states with clinical information about the relative effectiveness of drugs so they can compare prices.

It's an approach that Oregon, Washington and Idaho started partnering to use a few years ago. They researched information about the effectiveness of several classes of medications, such as cholesterol- lowering drugs, ulcer drugs and long-term painkillers, and then encouraged doctors to prescribe the least-costly effective medications. When the three states wanted to expand the research to 25 categories of drugs, it made sense, Kitzhaber reasoned, to bring in additional states and pool resources, "instead of everyone reinventing the wheel."

The result is the Center for Evidence-based Policy, which will tap into research by the Evidence-based Practice Center of Oregon Health and Science University. The CEP, which was officially launched in October, already has 15 states moving toward a contract, with another 15 expressing interest.

Each state would put up $96,000 to finance the effort and have input into developing which classes of medications to review and what questions the research should answer. After that, each state may use the information as it sees fit.

As to the entry fee, Gibson sees that as no barrier. States spend hundreds of million of dollars on drugs, so "$96,000 is really nothing, and the return on investment is very high."