California centralizes drug purchases for Medi-Cal

Kaiser Health News reported on more than 1,000 clinics filing a lawsuit against the state of California regarding a new plan called Medi-Cal Rx. The premise behind the plan is that by centralizing drug purchases, the state will be able to negotiate meaningful cost savings. Clinics are unhappy about this program because they typically receive a markup on the drugs that they buy for their patients, and by having the state provide the drugs, clinics will no longer receive the profit on each drug dose. The program does earmark $105 million for the clinics, but apparently, that amount does not offset the profit that the clinics originally received.

It seems that the state might have been trying to profit both ways: save on prescription drug costs, and save on healthcare services. Given that Medicaid patients already frequently have difficulty finding providers that accept Medi-Cal insurance, perhaps the state should have shared the savings with clinics. Even if doing so might not have been necessary to secure the clinics' participation, it might have bolstered their finances and increased access.